Thailand factory output slumps on severe flooding
- 28 November 2011
- From the section Business
Thailand's factory output fell by 35.8% in October after the country's worst flooding for 50 years.
The floods hit seven of the country's largest industrial estates, which are a hub for component makers for the car and electronics industries.
Output of hard disk drives fell 52.4% in October, while production of electronics fell 45.5%.
Car production, which is based in eastern Thailand away from the floods, fell 61.3% due to parts shortages.
It means that Thailand's economy may grow between 1.7% and 2.0% this year, rather the 2.72% projected last month, according to the country's finance ministry.
But growth would probably rebound to 5% next year, said Somchai Sujjapongse, the head of the ministry's fiscal policy office.
The government has also warned that the price of rubber, a key export for Thailand, is set to soar in the face of the flooding.
The rains caused flash flooding and landslides in several provinces along the Gulf of Thailand, uprooting trees and completely destroying some plantations.
Many economists expect the country's central bank to announce an interest rate cut on Wednesday to help kick-start the economy.