(Bangkok, 3rd) – Continuous heavy rains in southern Thailand have caused severe flooding, paralyzing supply chains for automobiles and high-tech components, and dealing a heavy blow to the region's export momentum. Despite the significant impact, the Bank of Thailand still assesses the nationwide economic impact as “limited.”
The Thai Ministry of Commerce issued a statement on Tuesday, noting that the floods have cut off several key transportation routes, and rail transport has been completely disrupted, rendering exporters unable to ship goods to Malaysia.
The statement described: “Hat Yai has become the biggest bottleneck. Although the border crossings remain open, most of the roads leading to the crossings are either flooded or impassable.”
The ministry warned that repeated supply chain disruptions would undermine international confidence in Thailand as a regional supply hub. “If timely deliveries cannot be ensured, buyers will inevitably seek alternative channels. Vietnam and Indonesia will not wait. If overseas clients turn to alternative suppliers now, regaining their trust in the future will be even more difficult.”
The Thai government had previously estimated that the economic losses from this flood disaster may reach as high as 500 billion baht. Bloomberg cited analysts saying that if exports of electronics, auto parts, and concentrated latex continue to be blocked, Thailand may suffer additional losses of more than $400 million per month.
Central bank estimates impact at only 0.1 to 0.2 percentage points
However, Bank of Thailand Governor Sethaput said the disaster’s impact on the overall economy is relatively limited. The Bangkok Post reported that he pointed out Hat Yai’s contribution to national GDP is only 2.6%, and the floods’ effect on GDP growth is estimated at 0.1% to 0.2%.
Sethaput emphasized that for the affected residents, however, the impact on their lives is extremely severe. The central bank is working with the Thai Bankers' Association to provide debt relief measures for Hat Yai residents affected by the disaster.
Government launches 267 billion baht aid package
On Tuesday, Thai Finance Minister Arkhom revealed that the cabinet has approved a small business support package worth a total of 267 billion baht, including 217 billion baht in low-interest loans provided by state-owned banks, and 50 billion baht in loan guarantees, aiming to improve the liquidity of SMEs nationwide, reduce business costs, and boost the weak economy.
Arkhom stated: “Thai SMEs are in a suffocating predicament, with liquidity almost depleted. We must inject funds into this sector to help businesses regain vitality.”
He expects the stimulus package to benefit 107,000 SMEs and contribute about 0.36 percentage points to the economy by 2026.
The statement described: “Hat Yai has become the biggest bottleneck. Although the border crossings remain open, most of the roads leading to the crossings are either flooded or impassable.”
The ministry warned that repeated supply chain disruptions would undermine international confidence in Thailand as a regional supply hub. “If timely deliveries cannot be ensured, buyers will inevitably seek alternative channels. Vietnam and Indonesia will not wait. If overseas clients turn to alternative suppliers now, regaining their trust in the future will be even more difficult.”
The Thai government had previously estimated that the economic losses from this flood disaster may reach as high as 500 billion baht. Bloomberg cited analysts saying that if exports of electronics, auto parts, and concentrated latex continue to be blocked, Thailand may suffer additional losses of more than $400 million per month.
Central bank estimates impact at only 0.1 to 0.2 percentage points
However, Bank of Thailand Governor Sethaput said the disaster’s impact on the overall economy is relatively limited. The Bangkok Post reported that he pointed out Hat Yai’s contribution to national GDP is only 2.6%, and the floods’ effect on GDP growth is estimated at 0.1% to 0.2%.
Sethaput emphasized that for the affected residents, however, the impact on their lives is extremely severe. The central bank is working with the Thai Bankers' Association to provide debt relief measures for Hat Yai residents affected by the disaster.
Government launches 267 billion baht aid package
On Tuesday, Thai Finance Minister Arkhom revealed that the cabinet has approved a small business support package worth a total of 267 billion baht, including 217 billion baht in low-interest loans provided by state-owned banks, and 50 billion baht in loan guarantees, aiming to improve the liquidity of SMEs nationwide, reduce business costs, and boost the weak economy.
Arkhom stated: “Thai SMEs are in a suffocating predicament, with liquidity almost depleted. We must inject funds into this sector to help businesses regain vitality.”
He expects the stimulus package to benefit 107,000 SMEs and contribute about 0.36 percentage points to the economy by 2026.