Floods impact on close watch
FINANCE Ministry officials are keeping a close watch on how the floods will affect farmers’ incomes, the manufacturing sector and the economy as a whole, but initial assessments indicate the impact will be limited.
Soraphol Tulayasathien, director of the economic stability analysis division at the Fiscal Policy Office, said yesterday that the impact from the latest spate of flooding would be contained so long as the industrial estates that had been hit by the devastating 2011 floods in Ayutthaya and other provinces were not severely affected this time.
The farm sector accounts for only 8 per cent of country’s gross domestic product (GDP), so the impact on the economy would be limited should the floodwaters damage major crops such as rice, cassava, rubber and sugarcane, said Soraphol.
The Finance Ministry is gathering the latest information about the floods and would feed that into its economic models over the coming days.
Many research houses, as well as the Bank of Thailand, have recently upgraded their economic growth forecasts, due to a surprisingly strong export performance.
For the first round of floods, in July and August, the BOT estimated damages of about Bt10 billion, with million of rai of farmland affected.
For the second round of flooding, beginning this month, the Ministry of Agriculture and Co-operatives estimates that about 1.38 million rai of farmland have been damaged.
Chao Kengchon, managing director of Kasikorn Research Centre, said: “The cost is estimated to be less than Bt10 billion, so it would not have a significant impact on the whole economy. We still believe the economic growth rate will come in at 3.7 per cent.”
But the purchasing power of farmers would likely by hit and this would reduce consumption at the grassroots level of the economy, he added.
As of Wednesday, the Ministry of Agriculture and Co-operatives reported that 43 provinces had been affected by the July-August first round of flooding, with 3.22 million rai of farmland affected. T
For the October flooding, 23 provinces have been hit with 1.38 million rai affected.
Meanwhile, Jakkarat Lertopas, deputy governor of the Industrial Estate Authority of Thailand, said there was no indication of an immediate threat to the industrial estates in Ayutthaya and other provinces.
