Ongoing flood has caused economic losses of over Bt400bln so far: Thai Chamber of Commerce

Initial damages from the flood crisis on the Thai economy are likely to exceed 400 billion baht, excluding successive impacts and chain of effects to providing goods and service to customers, said Pornsil Patchritanakul, Deputy Secretary-General of the Board of Trade of Thailand.

If flooding hits Bangkok’s business areas, the damage could climb another 120 billion baht per month, as the capital’s Gross Domestic Product (GDP) is about one trillion baht each year.

Pornsil said he wanted to see the government manage the flood problem systematically and build investors’ confidence by pledging a future safe from flooding.

Meanwhile, Payungsak Chartsutipol, chairman of the Federation of Thai Industries (FTI) said the initial damage on the industrial sector, after seven large industrial estates were submerged, was about 300-400 billion baht and the hardest hit industries were auto and auto parts, electrical appliance and electronics.

Losses from a trading halt of automobile and electrical appliance businesses and other businesses amounted to about 100 billion baht per month. The damages also depend on how long flood will last.

The FTI planned to meet entrepreneurs from flood-hit industrial estates, the Japan External Trade Organization, or JETRO and Japanese Chamber of Commerce on Oct 26 to discuss assistance in draining the flood water from industrial estates after the flood level was stable. The FTI will also set up a team to oversee integrated rehabilitation.

Ninnart Chaithirapinyo, FTI’s honorary chairman of the Automotive Industry Club said the current flood has more impact on the Thai auto industry than with the tsunami in Japan in March when auto production dropped by 30 percent.

The ongoing flood has forced the auto industry to suspend production for about two weeks so far and auto production will likely be halted for further one and a half months, which could cause production losses of 70,000-80,000 units or about 50 billion baht in total. (MCOT)

Central bank maintains policy interest rate at 3.5%

The Bank of Thailand (BoT) last Wednesday kept its key interest rate unchanged at 3.5 percent owing to the slowdown of the global economy and Thailand’s ongoing nationwide floods.

The BoT’s Monetary Policy Committee (MPC) believes that the current policy rate level is appropriate to address upcoming inflationary pressure and supporting economic adjustments amid heightened uncertainty in the global economy. Meanwhile, with the floods not yet over, their impact on the economy was not fully evident, the committee said in its statement.

Paiboon said the BoT sympathizes with the public and with businesses affected by the flood and sees the current low interest rate adequate to support post-flood rehabilitation. The bank gave assurances to the public that there is sufficient liquidity for the banking system and asked for cooperation from commercial banks to help affected customers by applying moratorium and offering soft loans.

Regarding the ongoing floods, the MPC noted that the severity of the floods has already caused a partial halt in some production sectors and will substantially curtail economic growth for the rest of the year, leaving growth lower than earlier projected. However, reconstruction spending would provide support for domestic demands to gradually pick up in the periods ahead.

Preliminary data for this year’s third quarter pointed to continued growth of the economy though the effects of a softer world economy became evident in the moderation shown in export growth. Trade and domestic demand, particularly from forthcoming government stimulus measures, will help limit downside risks to growth.

Meanwhile, inflationary pressure continued to be sustained by growth in domestic demand though declines in input costs, such as moderate oil prices from a weaker global economy as well as more stable inflation expectations, which would lessen inflationary pressure going forward.

However, the upside risks to inflation from higher public and private spending as the floods recede would need to be monitored, the bank statement said.

The BoT committee said it would remain vigilant in monitoring developments of risks and stand ready to take appropriate policy actions.

The Thai central bank lifted its policy interest rate from a record low of 1.25 percent in July 2010 to fight inflation. Core inflation in September stood at 2.92 percent. (MCOT)

Central bank maintains policy interest rate at 3.5%

The Bank of Thailand (BoT) last Wednesday kept its key interest rate unchanged at 3.5 percent owing to the slowdown of the global economy and Thailand’s ongoing nationwide floods.

The BoT’s Monetary Policy Committee (MPC) believes that the current policy rate level is appropriate to address upcoming inflationary pressure and supporting economic adjustments amid heightened uncertainty in the global economy. Meanwhile, with the floods not yet over, their impact on the economy was not fully evident, the committee said in its statement.

Paiboon said the BoT sympathizes with the public and with businesses affected by the flood and sees the current low interest rate adequate to support post-flood rehabilitation. The bank gave assurances to the public that there is sufficient liquidity for the banking system and asked for cooperation from commercial banks to help affected customers by applying moratorium and offering soft loans.

Regarding the ongoing floods, the MPC noted that the severity of the floods has already caused a partial halt in some production sectors and will substantially curtail economic growth for the rest of the year, leaving growth lower than earlier projected. However, reconstruction spending would provide support for domestic demands to gradually pick up in the periods ahead.

Preliminary data for this year’s third quarter pointed to continued growth of the economy though the effects of a softer world economy became evident in the moderation shown in export growth. Trade and domestic demand, particularly from forthcoming government stimulus measures, will help limit downside risks to growth.

Meanwhile, inflationary pressure continued to be sustained by growth in domestic demand though declines in input costs, such as moderate oil prices from a weaker global economy as well as more stable inflation expectations, which would lessen inflationary pressure going forward.

However, the upside risks to inflation from higher public and private spending as the floods recede would need to be monitored, the bank statement said.

The BoT committee said it would remain vigilant in monitoring developments of risks and stand ready to take appropriate policy actions.

The Thai central bank lifted its policy interest rate from a record low of 1.25 percent in July 2010 to fight inflation. Core inflation in September stood at 2.92 percent. (MCOT)