THAILAND’S economy suffered a double-digit contraction in the fourth quarter of 2011, pummelled by the kingdom’s worst floods in half a century, according to government data.

Gross domestic product (GDP) shrank 10.7 percent in October-December from the previous quarter, according to the National Economic and Social Development Board. GDP fell 9.0 percent compared with the same period in 2010.

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.

For the whole of 2011, Thailand’s economy expanded by 0.1 percent, the figures showed, missing analyst forecasts.

The government is optimistic about prospects for a rebound, with Finance Minister Kittiratt Na-Ranong predicting last week that the export-dependent economy could grow by 7.0 percent in 2012.

At their height last year’s floods affected 65 of 77 provinces in the low-lying nation, deluged hundreds of thousands of homes and forced the closure of large industrial parks, disrupting global supply chains.

After the clean-up operation began towards the end of the year, many of the worst-hit companies said it would be several months at least before their operations returned to normal.

Japanese auto giant Honda has idled operations since early October at its factory in Ayutthaya, where it was forced to destroy more than 1,000 cars that were submerged by the muddy waters.

In total seven major industrial estates in central Thailand fell victim to the kingdom’s worst floods in half a century, which left hundreds dead.

Thailand’s central bank in January cut its benchmark interest rate for the second time in three months, by 0.25 percentage points to 3.00 percent, in a bid to stimulate the weakened economy.     AFP