The devastating floods that ravaged Thailand in 2011 have social and economic impact on the country. There is no official announcement of the cost of flood damage. However, Fiscal Policy Research Institute, Ministry of Finance reported that total opportunity loss from the impact of the floods was 190,743 million baht; 20% of which was the loss in agricultural sector, 57% in industrial sector and 23% in service sector.
On the other hand, the office of the National Economic and Social Development Board remarked that total estimated loss was 248,386 million baht and 12% of which occurred in agricultural sector, whereas the impact on industrial sector and service sector was 64% and 24%, respectively. Meanwhile, World Bank reported much higher cost of damage, at 557,007 million baht; 92% of which was in industrial sector.
The infrastructure sector was also affected. After flooding the price of raw materials went up and some of the construction halted work resulting in 30% of the workers stopping work and going back to their respective homeland to help their family. Some 126 roads in the central area were damaged; 2,134.7 million baht will be needed to repair the roads. For the health sector, 107,000 patients were attributed to the flooding. Initial estimated spending in health care was 24.6 million baht.
Table 1: Flood Impact on GDP (unit: million baht)
Source: Office of the National Economic and Social Development Board
According to Office of the National Economic and Social Development Board, flood impact on GDP accounted for 2.3% of total GDP which totaled in value at 250,000 million baht (USD 8 billion). The impact on income in total was 500,000 million baht or USD 17 billion. The impact on industrial sector accounted for 160,000 million baht on GDP and 360,000 million baht on income.
The Fiscal Policy Research Institute estimated that the 2011 GDP growth rate in Thailand was 1.7%, down from 4.5% in 2010. This was mainly due to the sharp decline in the fourth quarter of 2011 as a result of the floods. GDP growth rate in the fourth quarter of 2011 was minus 2.8%, compared to 5.8% in the same period of 2010.
It is expected that the economic situation in the first quarter of 2012 would be stable and as a result, GDP growth rate is expected to be 2.9%, compared to 3.2% in the same period of 2011. The economy from the second quarter to the fourth quarter 2012 is expected to improve significantly when compared to 2011. GDP growth rate is expected to register 5.3%, 5.7% and 6.2% from second quarter to fourth quarter, respectively. On the whole, GDP growth rate in 2012 is expected to reach 5%, compared to the projected GDP growth rate of 1.7% in 2011.