BANGKOK - Thailand's manufacturing output in December dropped a bigger- than-expected 2.44% from a year earlier as a fresh wave of COVID-19 infections hit business activity, the industry ministry said on Wednesday.

The reading was worse than a 1.2% fall forecast in a Reuters poll, and a revised 0.2% rise in November.

However, the manufacturing production index (MPI) should turn positive in January as the government has quickly taken action to contain the new spread and exports are expected to improve, ministry official Thongchai Chawalitpichaet told a briefing.

On Wednesday, Thailand reported 819 new infections, with most of the cases found in a province that is the epicentre of the latest outbreak detected last month, following mass testing.

The December MPI index was dragged down by lower production of petroleum, sugar and rubber, although production of electronics, cars and tyres increased.

Capacity utilisation was 63.77% after November's revised 65.43%. Industrial goods make up about 80% of total exports, a key driver of Thai growth.

The ministry forecast the MPI index would increase 4%-5% in 2021 after contracting 8.8% last year.

(Reporting by Kitiphong Thaichareon; Writing by Orathai Sriring; Subhranshu Sahu) ((orathai.sriring@tr.com; +662 0802309;))