Thai economy may contract in Q1 2009 -finmin

BANGKOK, Dec 11 (Reuters) - Thailand's economy is expected to contract 0.5-1.0 percent in the first quarter of 2009 from a year earlier and post no growth in the second quarter, acting Finance Minister Suchart Thada-Thamrongvech said on Thursday.

After that weak performance in the first half of 2009, the economy was forecast to recover moderately in the second half to show average growth of 2.0 percent for the whole of the year, the minister told reporters.

"The economy should recover towards the end of the third quarter and into the fourth quarter, with annual growth of around 3-4 percent, giving average full-year growth of about 2 percent," Suchart said.

Suchart -- member of a cabinet that has caretaker status after Thai courts disbanded his People Power Party last week for electoral fraud -- predicted in early December that gross domestic product might grow only 1 to 2 percent in 2009.

The minister reiterated his call for the Bank of Thailand to cut interest rates after a bigger than expected 100 basis point cut in its policy rate last week to 2.75 percent.

"It was in the right direction and I believe the BoT should cut it further by another 100-150 basis points next year to help boost liquidity in favour of economic growth," he said.

The rate cut by the central bank's Monetary Policy Committee on Dec. 3 was the biggest in at least eight years.

Thai consumer confidence slumped in November, hit by the global credit crisis, airport blockades by anti-government protesters and continuing political uncertainty, a survey showed on Thursday.

The Thai economy, buffeted by both domestic and external factors, is likely to show at most just 2 percent growth in 2009, down from an estimated 4.0 percent this year, economist Thanavath Phonvichai of the University of the Thai Chamber of Commerce (UTCC) said, when presenting the survey.

(Reporting by Trisanat Kongkhunthian; Writing by Vithoon Amorn; Editing by Alan Raybould) Keywords: THAILAND ECONOMY/

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