The Government is accelerating its plan to facilitate post-flood business operations in order that the private sector will recover quickly.
Finance Minister Thirachai Phuvanatnaranubala said that the recovery of the business sector will contribute to the employment situation and raise consumer confidence.
He admitted that the scale of disaster caused by this year’s floods was extensive, and said that although industrial activities cover only 15 provinces, their proportion accounts for 40 percent of Thailand’s GDP. The World Bank estimates that damage to property caused by the recent floods is likely to stand at 640 billion baht, while the production sector is expected to suffer 710 billion baht.
Mr. Thirachai pointed out that the estimation was rather high, when compared with assessments made by relevant government agencies in Thailand. The Office of the National Economic and Social Development Board earlier estimated that the floods would damage the Thai economy by 2 percent, or about 200 billion baht.
He believed that impact on the country’s GDP would not be high, as the Government has a policy to speed up post-flood rehabilitation. GDP growth for 2012 is projected to be at least 5 percent. In order to achieve this target, he said, the Government needed to come up with various measures for recovery and restoration. Several fiscal, financial, and tax measures have already been implemented to facilitate liquidity in the business sector. The Government’s spending on rehabilitation in late 2011 and early 2012 is seen as an important factor to spur the Thai economy next year. The Office of the Board of Investment is considering more measures to assist companies whose businesses have been damaged by floods.
Meanwhile, President of the National Food Institute Petch Chinabutr said that the recent floods caused 50 billion baht in damage to the food industry in Thailand. At least 1,300 food factories, accounting for 15 percent of all food plants in the country, were affected.
Thai food exports in 2011 are expected to reach 963 billion baht, an increase of 20 percent. Even so, the figure is likely to be lower than the set target of between 970 billion and one trillion baht. As for next year, the food export value is projected at 971 billion baht, representing an increase of 0.8 percent over that of 2011. The debt crisis in the European Union poses a risk for Thai food exports to Europe, which is the fourth-largest market for Thai food.
Prime Minister Yingluck Shinawatra stated that the EU debt crisis was unlikely to have a direct impact on the Thai economy, which has solid fundamentals, and its stability is expected to be robust next year. Moreover, she said, the Government has a policy to stimulate the grassroots economy and the industrial sector and push for an increase in investment. The Prime Minister reaffirmed that the Government would be able to cope with global economic woes and that it had prepared measures to ease the impact of floods on the economy.