Thailand economic growth shrinks

Thailand economic growth shrinks

Drought, rising oil prices, and last December’s tsunami caused the Thai economy to shrink in the first quarter of the year.

According to figures released Monday by Thailand’s national planning agency, the nation’s economy shrank by 0.6 percent in the first quarter as growth fell to 3.3 percent compared to the same quarter last year.

Agricultural output, hurt by drought, contracted by 8.2 percent compared to last year’s first quarter, falling for the fifth quarter in a row.

The loss of foreign tourists in the aftermath of the tsunami resulted in a 7.4 percent contraction in the hotel sector and a 2.3 percent decline in the air transportation sector.

The economic slowdown has caused the government to cut its growth forecast for the year to 4.5 to5.5 percent, down from an earlier forecast of 5.5 to 6.5 percent growth, but some analysts consider even the new reduced numbers to be excessively optimistic.

The construction sector, however, was a bright spot, having expanded 13.3 percent compared to the first quarter of 2004.

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