BANGKOK Thailand's factory output shrank slightly more than expected in July as sluggish global demand pinched exports, a ministry official said on Thursday.

The manufacturing production index (MPI) fell for a 10th straight month in July, down 4.43% from a year earlier, compared with a forecast in a Reuters poll for a drop of 4.0% for July.

Output has been impacted by a global economic slowdown, although domestic consumption has increased due to strong tourism, the industry ministry said.

"Domestic factors have largely signalled a slowdown," Warawan Chitaroon, head of the ministry's Office of Industrial Economics, told a press briefing.

"We expect that in the last quarter of this year, after October, there should be signs of improving in the short term. But in the big picture, it is still in a downtrend."

In the January-July period, factory output contracted 4.54% year-on-year. Industrial goods account for about 80% of total exports, which have declined for 10 consecutive months.

The ministry on Thursday cut its 2023 MPI forecast to a fall of 2.8% to 3.8%, from a previous forecast of zero to 1% growth.

Thailand's customs-based exports contracted 6.2% in July from a year earlier, compared with analysts expectation of a dip of 0.75%. Exports had slumped 10.8% from June, a 10th month of falls.

(Reporting by Orathai Sriring and Satawasin Staporncharnchai; Editing by Martin Petty)