Floods to trim Thai GDP growth

16:45, November 11, 2010      

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The heavy flooding that hit several regions for a month would bring down the gross domestic growth in the fourth quarter of the year about 2-2.5 percent, an economist said on Thursday.

Thanawat Phonwichai, director of the Economic and Business Forecasting Center at the University of the Thai Chamber of Commerce, said all consumer confidence indices had gone down due the flooding and the strengthening baht.

The previous prediction of the GDP growth in the fourth quarter, released by the National Economic and Social Development Board ( NESDB), the top government economic planning agency, was 3-4 percent.

The floods had caused concern about income and job opportunities, while the strong baht also made people worry about their future income. The decline in consumer confidence had led to a decrease in demand for new cars, new homes and in tourism spending, the academic said as Bangkok Post online reported.

He also warned that if the government fails to rapidly heal the problems of flood affected people consumer spending will fall and that would hurt economic growth in the fourth quarter.

The sooner flood damage compensation is made, the faster the seed money, estimated at 50 billion baht (1.7 billion U.S. dollars) , will be injected into the system. This would minimize the negative impact on GDP growth, he said.

Heavy flood, caused by a combination of heavy rainfall and water released from overloaded reservoirs, has hit Thailand, especially in the Northeast and the South, since October 10 with the latest death toll of 203 people.

Source: Xinhua


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