Thailand's industrial output in July contracted for the first time in four months, hampered by a decline in auto production amid high household debt, official data showed on Thursday.

The Southeast Asian country's manufacturing production index (MPI) fell 3.98 percent last month compared to a year earlier, reversing from a revised 0.41 percent increase in June, according to the Ministry of Industry.

The decrease was mainly attributed to an 18.43 percent drop year-on-year in output of petroleum refining products, which resulted from a temporary shutdown by a producer for major maintenance operations, said the ministry's Office of Industrial Economics Director-General Passakorn Chairat.

Meanwhile, automotive output declined 7.66 percent from a year earlier as a major manufacturer temporarily halted production to relocate its assembly line, along with production cuts in response to a sharp drop in orders, Passakorn told a news conference.

For the second quarter of 2025, the MPI expanded 0.53 percent year-on-year, but shrank 0.7 percent in the first seven months of the year, Passakorn said.

The ministry lowered its MPI growth forecast to 0 percent to 0.5 percent this year, narrowing from an earlier expectation of 0 percent to 1 percent, citing pressure from U.S. trade policy, slowing competitiveness, and subdued domestic consumption.