Thailand’s export and industrial output continued to tumble for the second straight month in December, data from the Bank of Thailand showed.

The country’s vital manufacturing output fell 18.8 percent from a year ago, more than double the rate analysts had forecasted, while export plunged 15.7 percent, after 17.7 percent slump in November.

They said the economic recession was worst than expected, but nearly zero inflation still gave the central bank ample room for policy interest adjustment.

The Bank of Thailand last week forecasted a range of inflation for 2009 at between zero and 2.0 percent.

However, Munenori Yamada, the economic research committee chairman of the Japanese External Trade Organization (Jetro) in Bangkok, said Japanese companies will not relocate its production base from Thailand to the other countries despite the gloomier outlook in 2009.

On the other hand, he said several companies look to move production lines to Thailand, because it has provided strong support for material and OEM.