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Devastating Flooding likely to slash GDP by 1 to 1.7 per cent

Large-scale and devastating flooding is likely to cause damage equivalent to a range of 1-1.7 per cent of Thailand’s Gross Domestic Product GDP, said Thai Deputy Prime Minister/Commerce Minister Kittirat Na Ranong.

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flood damage costing 1-1.7 per cent of GDP

Large-scale and devastating flooding is likely to cause damage equivalent to a range of 1-1.7 per cent of Thailand’s Gross Domestic Product GDP, said Thai Deputy Prime Minister/Commerce Minister Kittirat Na Ranong.

Thailand’s emergency chief today met with the ministers of finance, industry, agriculture and cooperatives, senior officials from the Bank of Thailand and the Office of the National Economic and Social Development Board NESDB to discuss assistance measures for businesses affected by flood.

Mr Kittirat said the current flood is more devastating than expected and that the Thai economy is likely to feel the brunt more than earlier forecast at about 0.6-0.9 per cent of the GDP–about Bt60-90 billion. The damage could amount to 1-1.7 per cent of GDP.

The assessment does not yet include damage to the Nava Nakorn Industrial Estate, which has been flooded after its protective dyke was breached on Monday. Finance Minister Thirachai Phuvanatnaranubala said if the government speeds up spending money on rehabilitation, it will help drive the economy to offset losses incurred from the flooding.The government will ask for cooperation to expedite flood insurance claims for affected factories.

The total amount of insurance for four industrial estates in Ayutthaya is about Bt250 billion while losses have reached Bt77 billion so far.In the coming 3-5 years, the government must improve integrated infrastructure including dams, dykes, water retention areas, roads and irrigation system to tackle the flood results effectively and to draw confidence from investors, he said.Bank of Thailand Governor Dr Prasarn Trairatvorakul said the outstanding loans to  industries affected by the Ayutthaya amount to Bt60 billion but it will not affect the financial position of commercial banks. Each bank has measures to help their flood-affected customers.

The BoT will work out with commercial banks to boost liquidity of the private sector to ensure a sufficient money supply. The central bank will also seek cooperation from those banks to extend loan repayment and tax form filing to help those plants.

The permanent secretary for finance viewed that the 2012 deficit budget may be increased to seek loans for post-flood rehabilitation Industry Minister Wannarat Channukul said plants which survived flooding may be asked to hire labourers of flooded factories. Otherwise, such workers may be offered training to improve their skills during their period of unemployment. Investment privileges may be offered to affected plants to shoulder their tax burden.

NESDB Secretary-General Arkom Termpitayapaisit sees flood damage costing 1-1.7 per cent of GDP, or Bt182 billion, including Bt40 billion in the agricultural sector, Bt110 billion in the industrial sector and the remaining damage in trade, tourism and basic infrastructure sectors.It is expected to take about 3-6 months for rehabilitation work. The sooner rehabilitation is complete, the less impact on Thai GDP. MCOT online news

via Large scale flood likely to slash GDP by 1-1.7 per cent.

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Economics

EEC Expects 300-billion-baht Investment This Year

National News Bureau of Thailand

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BANGKOK (NNT) – The Eastern Economic Corridor (EEC) has expected investment to triple to 300 billion baht this year as investment projects previously held by the coronavirus outbreak get pushed forward again.

EEC Secretary -General Kanit Sangsubhan said actual investment in the EEC could be up from 96 billion baht in 2020, or 46% of total project applications as investors did not invest last year, and they would have to do it this year.

He said there will be a bunch of projects held up from previous years.

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Economics

Commerce Ministry sets Thailand’s export growth target at 4% for 2021

National News Bureau of Thailand

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BANGKOK (NNT) – Thailand has seen export growth of 0.35 percent in the first month of the year. The Commerce Minister has ordered the Department of International Trade Promotion to advance an action plan to accelerate growth, which is set at 4 percent this year.

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Ecommerce

Has Covid-19 prompted the Belt and Road Initiative to go green?

Oxford Business Group

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Has Covid-19 prompted the Belt and Road Initiative to go green?
– Covid-19 led to a slowdown in BRI projects
– Chinese overseas investment dropped off in 2020
– Government remains committed to the wide-ranging infrastructure programme
– Sustainability, health and digital to be the new cornerstones of the initiative 

Following a year of coronavirus-related disruptions, China appears to be placing a greater focus on sustainable, digital and health-related projects in its flagship Belt and Road Initiative (BRI).

As OBG outlined in April last year, the onset of Covid-19 prompted questions about the future direction of the BRI.

Launched in 2013, the BRI is an ambitious international initiative that aims to revive ancient Silk Road trade routes through large-scale infrastructure development.

By the start of 2020 some 2951 BRI-linked projects – valued at a total of $3.9trn – were planned or under way across the world.

However, as borders closed and lockdowns were imposed, progress stalled on a number of major BRI infrastructure developments.

In June China’s Ministry of Foreign Affairs announced that 30-40% of BRI projects had been affected by the virus, while a further 20% had been “seriously affected”. Restrictions on the flow of Chinese workers and construction supplies were cited as factors behind project suspensions or slowdowns in Pakistan, Cambodia and Indonesia, among other countries.

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