BEHIND THE NUMBERS
The law of gravity dictates that what goes up must come down. This is also true for an economy: When it has been expanding quickly, growth is bound to fall _ unless it is further supported by some gravity-defying force.
Thailand's gross domestic product (GDP) advanced 2.8% in the second quarter compared with the same quarter last year, slowing further from the 5.4% rate in the previous quarter. The closing figure for the final quarter last year was a much more impressive 19.1% rate, albeit from the flood-soaked base of late 2011. All in all, the latest official release suggests, as the Bank of Thailand put it, that "normalisation" of the economy to its potential level is taking place following a period of extraordinary growth.
On a quarterly basis, however, GDP has declined for two consecutive quarters. Therefore, we have entered a technical recession. This prompted many research houses to cut their growth projections for 2013, from around 5% or higher to below 4%. Such bad news also turned the stock market even more bearish, just as investors were dealing with the prospect of the US Federal Reserve turning off its money tap.
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