Crises to cut Thai GDP growth to 3.6%:UTCC

“Notwithstanding the government’s policies to stimulate the country’s growth this year, economic growth will be hard hit by the flooding, as now not only farming, but also industry, trading and tourism are suffering,” Thanavath Phonvichai, director of the UTCC’s Economic and Business Forecasting Centre, said yesterday.
The centre, a private-sector think tank, said its study showed that the widespread flooding in 58 provinces would cause an estimated loss of Bt130.1 billion, chopping 1-1.3 per cent out of gross domestic product.
The loss would increase by Bt10 billion monthly if the flooding is prolonged. If the flooding spreads to provinces in the South, which rely mainly on tourism, the loss could increase by between Bt50 billion and Bt70 billion.
UTCC called for the government to urgently prioritise measures to relieve the impact of flooding, rather than focus on the populist policies that they promised before the election.
The government should speed up compensation payments to flood victims in each community; inject capital into village funds; and spend money on developing land in river basins to minimise the impact of flooding and stimulate the domestic economy, he said.
The study also found that farming has taken the brunt of the flooding damage with an estimated loss of Bt67.76 billion, divided into Bt49 billion for rice farms, Bt4.57 billion for fisheries, Bt3.47 billion for livestock farms and the rest for other commercial crops.
Industry would lose Bt21.73 billion at least due to the flooding at the Saharattana Nakhon Industrial Estate in Ayutthaya, since more than 50 factories must suspend operations because of a blackout.
Trading would lose Bt16.88 billion, while tourism would lose Bt7.17 billion.
Under the revised GDP forecast for this year, farming would grow by 3.3 per cent instead of 3 per cent, driven mainly by higher commodity prices.
Industry growth would drop from the earlier estimate of 5.2 per cent to 3.8 per cent and investment would fall from 8.6 to 6.4 per cent on deeper worries over the decelerating global economy.
Inflation is expected to increase by 3.8 per cent this year, while the consumer price index would rise by 3.5-4 per cent next year due to higher fuel and goods prices, which would be affected by the government’s domestic economic stimulus measures to boost wages and incomes, he said.
UTCC projects the economy expanding by 4.3 per cent next year, in line with global economic growth of 4 per cent.