UTCC estimates southern flood damages at 40bn baht, 0.22% of GDP

The University of the Thai Chamber of Commerce (UTCC) on Tuesday unveiled its estimate of the damage caused by floods in ten southern provinces, pegging it at around 40 billion baht, or approximately 0.22% of the GDP.

The UTCC also revealed the results of a survey on damaged businesses in the southern provinces, which showed that business owners preferred cash aid over the government’s offer of soft loans.

Wichian Kaeosombat, assistant director of the UTCC's Centre for Business and Economic Forecasting, said the study found that about 2.19 million people from 789,695 families in the ten southern provinces were affected by the floods.

Wichian stated that from November 21 to 30, the damage was estimated to average 1.5 billion baht per day. The total estimated damage by sector was 22.5 billion baht for the tourism and services sector, 10.7 billion baht for the agricultural sector, and 7 billion baht for the manufacturing and public utility sectors.

He explained that the floods had paralyzed the economy in the affected provinces, with trade, services, and transport disrupted. Six out of ten business operators had to temporarily close their businesses.

In addition, national-level events, such as the Thai Chamber of Commerce seminars and the SEA Games, had to be relocated from Songkhla. These relocations resulted in lost business opportunities for the province and could also undermine confidence in Thailand's ability to host such events in the future.

Wichian also noted that the survey revealed over 70% of business operators would need more than a month to resume operations due to damaged assets and stock. Furthermore, the affected businesses were struggling with liquidity shortages, and essential infrastructure, such as roads, electricity, and water supply, had also been damaged.

The survey showed that most business operators preferred cash compensation over soft loans, as they needed cash to repair their facilities, replenish stock, and avoid increasing their debt liabilities.

Wichian outlined three key measures that business operators recommended for the government to revive the southern economy:

• Direct injection of cash into the economy: Business owners urged the government to expedite the announcement of measures and criteria for rehabilitation.
• Speed up the repair of basic infrastructure: They called for urgent repairs to the electricity transmission system, tap water, and roads.
• Speed up the cleaning and restoration of damaged areas: The government was urged to mobilize teams to clean and restore the affected areas.

Wichian concluded that business operators viewed soft loans as a long-term measure for restoration, suitable for the second month following the flood crisis.