Flood damage higher than 0.6-0.9% of GDP: Commerce Minister

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Deputy Prime Minister/Commerce Minister Kittirat Na Ranong on Thursday conceded that the damage caused by the current disastrous flooding could rise higher than the 0.6-0.9 percent of gross domestic product (GDP) forecast earlier.

Kittirat expressed his concern over the far-reaching impact of the country’s worst flooding in decades which so far has left more than 280 people dead. At least three major industrial estates in the former capital of Ayutthaya, north of Bangkok, have closed after being badly hit by the deluge.

The deputy prime minister supervising the economy said concerned agencies are closely monitoring the situation to evaluate the actual cost of damage as flooding is likely to worsen and cause extensive damage over a wider area.

Thailand’s initial losses in the nationwide flooding were estimated at Bt60-90 billion or 0.6-0.9 percent of Gross Domestic Product (GDP), Finance Minister Teerachai Puwanartnaranubala said on Monday.

A loss of some Bt60 billion, or 0.6 percent of GDP, was indicated by the Bank of Thailand (BoT), but the Office of the National Economic and Social Development Board (NESDB) assessed losses at Bt80-90 billion, nearer to 0.9 percent of GDP.

Somchai Sujjapongse, director of the Fiscal Policy Office, said the current flooding is likely to shrink this year’s gross domestic product (GDP) growth to 3.7 percent from the 4.5 percent forecast in June before the flood crisis.

Meanwhile, consumer confidence fell for a second month in September from 73.8 in the previous month to 72.2 due to the severe floods, according to a survey released on Thursday by the University of the Thai Chamber of Commerce (UTCC) Centre for Economic and Business Forecasting.

Other factors which dampen consumer sentiment are concerns over the rising cost of living, fuel prices, uncertainty over the global economy and shaky confidence on the implementation of the government’s key policies.