Thai Jobless Rate May Stabilize as Government Begins Spending

June 5 (Bloomberg) -- Thailand’s jobless rate may stabilize amid signs the nation’s economy is over the worst of its first recession in a decade and the government begins spending on projects to help spur demand and employment.

Unemployment rose to 2.1 percent in the first quarter, compared with 1.6 percent a year earlier, the National Economic & Social Development Board, said in Bangkok today.

“The situation shows positive signs because of the government’s job creation scheme and also the start of a stimulus package,” Suwannee Khamman, deputy secretary-general at the board, said at a press briefing.

Thailand’s economy shrank 7.1 percent in the first quarter, its second quarterly contraction, after the global recession led to a collapse in exports. The government began pumping cash into the economy in April to spur demand, and Finance Minister Korn Chatikavanij said yesterday the worst is over.

On March 3, the state-run board predicted Thailand’s jobless rate may surge to 3.5 percent this year from 1.3 percent in 2008 as about 500,000 people lose their jobs, taking unemployment to about 1.3 million people. The nation has a labor force of 38.5 million, according to Bank of Thailand data.

KCE Electronics Pcl, the country’s biggest publicly traded printed-circuit-board maker, said June 2 it’s increasing production. Tipco Asphalt Pcl, a maker of paving material, said a day later it expects sales to the Thai government will help it return to profit this year. Hana Microelectronics Pcl, a semiconductor packager, said last month orders have rebounded.

Industrial output declined the least in five months in April as exporters resumed filling orders from customers seeking to restock depleted inventory, the central bank said on May 29. Exports, which account for 70 percent of gross domestic product, have sunk every month since November.

Prime Minister Abhisit Vejjajiva’s government on May 6 unveiled a 1.4 trillion-baht ($41 billion) investment plan that it plans to implement by the end of 2012. His seven-party coalition government is strong enough to pass a borrowing plan and next year’s 1.7 trillion-baht budget, Abhisit said May 20.