So the flooding back in Thailand had a far worse impact on GDP versus what all analysts and economy agencies expected. The National Economics and Social Development Board (NESDB) reported the Thai 4Q11 GDP slumped -9.0% yoy, to the lowest in the past 53 quarters and much below the market estimate of -5.0% yoy. Compared to last quarter, the GDP fell over 10.7% qoq pressured by the severe 70 year flood crisis that caused damage to all sectors of the economy, especially production, services and transportation.
So what now…going forward everyone is likely to increase their GDP forecasts for 2012 given that 2011’s GDP grew only 0.05%, far lower than their estimates, so its simply a factor of a lower base for 2011. We still think that the economy will do far better in 2012 than what most people expect, we still see government spending, increasing traffic at the airports, industrial estates in the eastern region performing extremely well (hence more FDI) plus several other factors likely to push GDP upwards.