Exports and employment: the Thai economy after the flood emergency
by Weena Kowitwanij
Bangkok needs to regain the confidence of foreign investors. The debt problems of the EU and the United States have had a greater impact - perhaps –than the natural disaster. For 2012, government policies are expected to boost growth, estimated at around 7%. Appeals to the executive to take steps to prevent further disasters.
Bangkok (AsiaNews) - The Thai government must regain the confidence of foreign investors, to stem losses and revive an economy marked by the floods of 2011 - the worst in 50 years - which have crippled entire areas of the country, causing at least 600 dead and thousands displaced. Analysts and experts in international finance made these recommendations and pointed out that data on growth is also influenced by the global economic crisis, the difficulties of the United States and the debt of countries in the EU; factors that have contributed to slowing exports - particularly in the agricultural sector - and to a rise in unemployment. The Thai central bank has lowered the estimates of GDP growth for 2011, which should be around 2.6%, but experts warn that, by the second quarter of next year, Thailand is expected to return to normal.
The estimates for 2012 released by the Department for Social Development and the National Economy, elaborated on the data of the third quarter, show that floods have accounted for 3.4% of gross domestic product. This will determine, within a year, a decrease of 1, 9%, in spite of the initial estimates around 2.9%. Na-Ranong Kitirat, Minister for Commerce, said that growth for 2012 will amount to 7%, thanks to government policies focused on three points: revenue growth, agricultural production, wages. The Executive could cap the price of essential goods including rice, increase wages and focus on improving export data from the first quarter of next year.
Meanwhile, the governor of the Central Bank of Thailand, Prasarn Trairatvorakul, confirms the decline in GDP in the fourth quarter of 2011, due to flood damage. He appeals to the government, to put measures in place for first response to natural emergencies and thus instill new confidence in foreign investors. The flood, he said, has affected both the demand in products and production itself, interrupted during the peak of the crisis. However, the governor clarifies, the damage is "limited to the short period and soon there will be a recovery," especially in the tourism sector, and he fixed the drop in GDP for the fourth quarter of this year "compared to 2.6% with previous estimates of 4%. "
Some Thai analysts also put the political factor among those that influence the economic growth. In an editorial Olarn Sukkaseam said that in recent years, "the Thai economy recorded a positive balance of around 4%", until the recent change of government that led to the defeat of the Abhisit's Democrats, and marked the rise of Thaksin Shinawatra’s sister”. He adds that most problems are caused by the floods and the "political interference" in the management of water resources. For the entrepreneur Kobkang Wattanawarangkul, owner of a group specializing in the production of components for electronics, he still cannot make a precise estimate of the losses caused by floods. A rapid return to normal production is essential, he adds, to prevent further "losses in business."
The estimates for 2012 released by the Department for Social Development and the National Economy, elaborated on the data of the third quarter, show that floods have accounted for 3.4% of gross domestic product. This will determine, within a year, a decrease of 1, 9%, in spite of the initial estimates around 2.9%. Na-Ranong Kitirat, Minister for Commerce, said that growth for 2012 will amount to 7%, thanks to government policies focused on three points: revenue growth, agricultural production, wages. The Executive could cap the price of essential goods including rice, increase wages and focus on improving export data from the first quarter of next year.
Meanwhile, the governor of the Central Bank of Thailand, Prasarn Trairatvorakul, confirms the decline in GDP in the fourth quarter of 2011, due to flood damage. He appeals to the government, to put measures in place for first response to natural emergencies and thus instill new confidence in foreign investors. The flood, he said, has affected both the demand in products and production itself, interrupted during the peak of the crisis. However, the governor clarifies, the damage is "limited to the short period and soon there will be a recovery," especially in the tourism sector, and he fixed the drop in GDP for the fourth quarter of this year "compared to 2.6% with previous estimates of 4%. "
Some Thai analysts also put the political factor among those that influence the economic growth. In an editorial Olarn Sukkaseam said that in recent years, "the Thai economy recorded a positive balance of around 4%", until the recent change of government that led to the defeat of the Abhisit's Democrats, and marked the rise of Thaksin Shinawatra’s sister”. He adds that most problems are caused by the floods and the "political interference" in the management of water resources. For the entrepreneur Kobkang Wattanawarangkul, owner of a group specializing in the production of components for electronics, he still cannot make a precise estimate of the losses caused by floods. A rapid return to normal production is essential, he adds, to prevent further "losses in business."
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