BANGKOK, Sept 30 — Thailand's factory output contracted in August and was weaker than forecasted, as slowing exports, falling tourist numbers, and a strong baht weighed on the economy.
Thailand's manufacturing production index fell 4.19 per cent in August from a year earlier, the Industry Ministry said, based on figures published today. Negative factors included a weaker car industry and a decline in industrial sentiment.
The figure compares with a forecast year-on-year decline of two per cent in a Reuters poll and follows an annual drop of 3.98 per cent in July.
"The number is quite alarming, down 4.19 per cent when compared to last year," said the ministry's industrial economics office head Passakorn Chairat during a press conference.
He added that the MPI forecast for this year will be lowered from the current forecast of zero per cent to 0.5 per cent growth.
The factory output figures came as a new government pledged to revive the economy. Thai exports grew 5.8 per cent in August from a year earlier, the slowest pace in nearly a year due to the stronger baht and the impact of United States (US) tariffs, according to the Commerce Ministry.
The US set a 19 per cent tariff on imported goods from Thailand, lower than the 36 per cent rate announced earlier and in line with other countries in the region.
The Commerce Ministry aims to conclude a reciprocal tax agreement with the US by the end of the year, Commerce Minister Suphajee Suthumpun told Parliament late yesterday.
It will also seek to expand trade in markets like Japan, Singapore, South Asia, and the Middle East, and accelerate free trade agreement negotiations with the European Union and South Korea.
Car production in Thailand, a regional auto-making centre, dropped 6.1 per cent in August from a year earlier, according to the Federation of Thai Industries.
Southeast Asia's second-largest economy is projected to expand by 1.8 per cent to 2.3 per cent this year, according to the state planning agency. It is expected to slow down sharply in the second quarter of 2025 due to the impact of US tariffs.
Last year's economic growth of 2.5 per cent lagged behind Thailand's peers.
