Widespread flooding will take a toll on the country’s exports in the final quarter, pulling down the annual growth rate in baht value to 17.8% from 19.2% forecast earlier, according to the University of the Thai Chamber of Commerce.
Growth in dollar terms is now forecast in a range of between 23.3% and 24.8% to between $240.79 billion and 243.7 billion, said Aat Pisanwanich, director of the Centre for International Trade Studies at the university.
The centre estimated 51.57 billion baht in damages from the floods in two industrial locations — Rojana Industrial Park and Saha Rattananakorn Industrial Estate in Ayutthaya — which would reduce GDP by 0.52%.
Damage at Rojana Industrial Park is estimated at 43.97 billion baht while a loss of 7.6 billion would come from Saharattananakorn Industrial Estate. However, the amount excluded damage to properties, machinery and other assets which could be as high as 300-400 billion baht.
The highest damage is reported in the medical equipment and watch industries, followed by radio, television and communication equipment, electrical machinery and automobiles.
Mr Aat suggested the government collect a flood tax to spend on assisting flood victims, which in the near future may also include people in Bangkok.
He also proposed establishing a “one tambon, one water reservoir” programme with an integrated plan for each province.
Fred Gibson, associate economist at Moody’s Analytics, said severe flooding in Thailand would disrupt industrial production and increase near-term inflation.
The worst floods in decades — notwithstanding the tragic loss in life — is expected to cost the economy $1.9 billion and curb some industrial production, he said.
“This will be disheartening for Thai automobile and electronics manufacturers who have only just recovered from Japan-related supply chain disruptions shown from the rebound of industrial output in August by 7% year-on-year,” he said.
“Yet losses could be compounded if flooding spreads to industrial operations on the Eastern Seaboard, which houses 66% of Thai industry.”
Despite rising downside risks to the Thai economy, Moody’s Analytics still maintains its forecast for near-term GDP growth at 3.7% for 2011 and 3.9% for 2012.
In another development, the Office of the Insurance Commission (OIC) said that as of Oct 7, damages totalled 5.96 million baht for insured individuals for loss of life, and property losses were worth 319.70 million. It said 818 insured cars were damaged but values were not available.
In the two heavily damaged industrial estates in Ayutthaya, Saha Rattananakorn and Rojana, it reported a total of 91 factories with insurance coverage worth a total of 77.74 billion baht.
Source: Bangkok Post