Fresh Storm Forecast for Flood-Hit Thailand Adds to Growth Risks
(Bloomberg) -- Thailand is bracing for a fresh tropical storm after weeks of heavy rainfall inundated large swathes of its cropland, undermining efforts to revive the pandemic-hit economy by easing Covid restrictions and a gradual tourism reopening.
Tropical storm Lionrock is expected to bring more rain to the northeastern region next week, while a strong monsoon is expected to cause heavy downpour in southern Thailand, according to the Thai Meteorological Department. Flood warnings have been issued for several provinces and districts, many of which are still under water from the effects of two other storms that swept the region in recent weeks.
While the flooding this year isn’t as severe as the one in 2011 that affected an area 50 times larger, the worsening situation may impact a nascent recovery in the economy that’s already facing risks from soaring energy prices and a weaker baht. The flooding, which has largely spared factories, comes weeks ahead of the planned quarantine waiver for foreign tourists in key provinces including Bangkok and Chiang Mai.
The flooding may cut gross domestic product by at least 0.2 percentage point this year and more if the upcoming storm unleashes more havoc, said Nattaporn Triratanasirikul, an economist at Kasikornbank Pcl’s research unit.
“The final quarter will be very challenging as local demand remains weak and we don’t expect much contribution from tourism even after the reopening,” Nattaporn said.
Over the past few weeks, Prime Minister Prayuth Chan-Ocha has visited flood-hit regions to assess the situation and announced various relief measures. The extreme weather this year comes after back-to-back severe droughts, which hit crops from sugar to rice. Since September 23, more than 300,000 households in 33 provinces have been affected by the floods, with nine fatalities, according to the Department of Disaster Prevention and Mitigation.
The economic losses from the floods are seen as high as 20 billion baht ($591 million), half of which will be from the agricultural sector, according to Thanavath Phonvichai, president of the University of Thai Chamber of Commerce. A rebound seen in consumer confidence in September may be short-lived and flooding will be one of the factors, he said.
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