The Bank of Thailand (BoT) on Friday cut the country’s 2011 economic growth to just one per cent from the earlier projected 4.1 per cent thanks to the heavy blow of the flood crisis last year, but the economy is expected to grow 4.9 per cent this year and 5.6 per cent in 2013.
Paiboon Kittisrikangwan, BoT assistant governor said the impact of severe flooding on the country’s economy amounted a loss of 3.1 per cent of gross domestic product (GDP) or about Bt340 billion in damages. GDP in the fourth quarter of 2011 shrank 7.4 per cent, compared to the third quarter, with the blow to Thai economy was more severe than that of the 2008 US sub-prime crisis and the Tom Yum Kung crisis in 1997 as flooding heavily affected the industrial sector.
Damage at the industrial estates caused severe supply chain disruptions and overall rehabilitation needs a long time to complete due to insurance claim processes and the need to purchase new machines for those plants. The Thai economy this year is in a period of recovering from the flood in 2011, Mr Paiboon said. It is expected that the Thai economy will return to normal in the third quarter of this year and that the overall economic recovery will be supported in part by spending on flood rehabilitation.