Thai central bank raises 2012 growth forecast to 6%

A worker rides on a cement tank hanging on a crane at a construction site in Bangkok, Thailand Wednesday, April 18, 2012. Thailand’s central bank on Friday upgraded its forecast for the kingdom’s economic growth this year from 5.7 percent to 6 percent. AP PHOTO/APICHART WEERAWONG

BANGKOK—Thailand’s central bank on Friday upgraded its forecast for the kingdom’s economic growth this year, predicting an expansion of 6.0 percent thanks to a recovery from last year’s massive floods.

In March the Bank of Thailand predicted gross domestic product (GDP) would grow 5.7 percent in 2012.

“The Thai economy has returned to normal faster than expected as many economic activities have recovered since the first quarter of this year,” said assistant governor Paiboon Kittisrikangwan.

But the central bank also trimmed its forecast for economic growth in 2013 from 6.0 percent to 5.8 percent.

The economy suffered a double-digit contraction in the fourth quarter of 2011, the sharpest on record, after the worst floods in half a century pummeled industry.

The months-long floods last year took a heavy toll on Thailand’s industrial heartland north of Bangkok, with many factories forced to close temporarily.

Earlier this month the central bank held its key interest rate steady at 3.0 percent, where it has been since January, to aid the economic recovery.