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23 Nov, 2010, 04.11AM IST,REUTERS
Thailand slides into 'technical' recession

BANGKOK: Thailand’s economy slipped into a technical recession in the third quarter, reinforcing signs of an Asia-wide slowdown as export growth cools, manufacturing ebbs and the impact of massive government stimulus spending fades.

South-East Asia’s second-biggest economy shrank 0.2% in the third quarter after a revised 0.6% contraction in the second, data showed on Monday, reducing chances of another interest rate rise next month. The data reinforce signs of a slowdown across much of the region, from North Asian export powerhouses China, South Korea and Taiwan to South-East Asian “tigers” Thailand, Singapore and Indonesia. Strong growth in Asia has been one of the few bright spots for the struggling global economy.

Figures last week showed Taiwan’s economic growth slowing in the third quarter, while Singapore’s trade-reliant economy shrank 18.7% and Indonesia reported this month its first slowdown in annual growth in five quarters. From a year earlier, Thailand grew 6.7% in the quarter, largely in line with economists’ forecasts and slowing from growth of 9.2% in the second quarter, the data from the state planning agency showed.

“Looking forward, we expect weaker global demand to bring Thailand’s economic growth to below trend in the fourth quarter of 2010, and in the first half of 2011,” said Usara Wilaipich, a Bangkok-based economist at Standard Chartered Bank. Malaysia’s economic growth slowed more than expected to 5.3% in the third quarter from 8.9% in the second, its central bank said on Monday, noting growth in the second half of the year and in early next year was moderating.

OCBC economist Gundy Cahyadi said growth almost stalled in the third quarter from the previous three months, though few analysts give quarter-on-quarter figures. The Asian slowdown has been exacerbated by the US dollar’s slide, which has driven up regional currencies and started to erode export revenue.

The Bank of Thailand is likely to keep its trend-setting one-day repurchase rate unchanged at 1.75% at its next policy-setting meeting on December 1, said Arkhom Termpittayapaisith, secretary-general of the National Economic and Social Development Board, Thailands state economic planning agency.

Private economists echoed that view after the data, which was marginally better than a deeper 0.4 per cent contraction expected by most economists in a Reuters survey.

``We expect less aggressive monetary policy by the Bank of Thailand and possible delays on interest rate hikes next year,’’ said Isara Ordeedolchest, an economist at KT Zeamico Securities, a stock brokerage in Bangkok.

Pimonwan Mahujchariyawong, economist at Kasikorn Research Centre, expects the economy to contract again in the fourth quarter, hurt by a nearly 12 per cent rise in the baht this year against the dollar to a 13-year high and floods that have killed more than 200 people since October.

RATES SEEN ON HOLD

Thailands debt market has largely priced in a rate pause next month, with one-year swap rates down by 22 basis points in the past two weeks. Government bond yields were barely changed after Mondays economic data.

Indonesias central bank is also seen pausing to keep its policy rate on hold at a record low 6.5 per cent well into 2011 as it tries to avoid encouraging an even bigger flow of investment capital to its markets.

Despite the slowdown, Thailands state planning agency raised its forecast for economic growth this year to 7.9 per cent from 7.0-7.5 per cent projected in August, and tipped growth of between 3.5 per cent and 4.5 per cent in 2011.

Agency chief Arkhom said the quarterly contraction was due to lower state spending and a slowdown in private investment.

``Its cyclical that Q3 is usually weaker than other quarters,’’ he told reporters, adding that the flooding across much of Thailand over October and November shaved economic growth by 0.3 percentage points.

He said the fourth-quarter performance depended on strength in exports which his agency expected to rise 25.1 per cent this year before slowing to about half that rate of growth next year.

The data puts Thailand technically in recession after two straight quarters of economic contraction.

Earlier data had indicated the economy grew 0.2 per cent in the second quarter from the first, but that was revised down to show it had contracted, due largely to political unrest over April and May in which more than 90 people were killed.

SET:nov23:1009
dec 23:1021
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China GDP Growth Rate

The Chinese economy expanded 9.6 percent in the third quarter of 2010, as measured by the year-over-year change in Gross Domestic Product (GDP YoY). Unlike the commonly used quarterly GDP growth rate the annual GDP growth rate takes into account a full year of economic activity, thus avoiding the need to make any type of seasonal adjustment. The China Gross Domestic Product is worth 4909 billion dollars or 7.92% of the world economy, according to the World Bank. From 1989 until 2010, China's average annual GDP Growth was 9.30 percent reaching an historical high of 14.20 percent in December of 1992 and a record low of 3.80 percent in December of 1990. This page includes: China GDP Growth Rate chart, historical data and news.

Country Interest Rate Growth Rate Inflation Rate Jobless Rate Current Account Exchange Rate
China 5.56% 9.60% 5.10% 4.20% 70500 6.6640

Year Mar Jun Sep Dec
2010 11.90 10.30 9.60
2009 6.20 7.90 9.10 10.70
2008 10.60 10.10 9.00 6.80



China's GDP Slows to 9.6%
Published: 10/22/2010 8:23:09 AM By: TradingEconomic.com

China's economy grew by 9.6% in the third quarter, indicating a slight deceleration in growth this year as the government's cooling measures appeared to have had some effect.

The numbers compared to 10.3% on the second quarter and 11.9% in the first, but at the same time consumer price index (CPI)inflation hit a two year high of 3.6% in September.

While the GDP figures will please the country's fiscal policy makers who have been trying to cool the pace of growth, the stubborn inflation numbers will be more of an issue.

The government had set a ceiling for inflation levels at the start of 2010 at 3%, and had predicted that inflation would fall well below that figure during the second half of the year.

CPI inflation stood at 3.5% in August, with most of the rise blamed on volatile food prices. The inflation hike will be of concern to market watchers who will expect Chinese growth to remain strong over the coming months.

WHY SHANGHAI COMPOSITE DOWN FOR THE YEAR 2010?????????