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Widespread flooding in Thailand to shave the countrys economic output this year

October 12/2011

(ICIS) -- Widespread flooding in Thailand will shave the countrys economic output this year, slowing its GDP growth by as much as a full percentage point, given the heavy disruption caused on domestic production, industry sources and analysts said on Wednesday. The Thai capital of Bangkok is on high alert as floodwaters from the central provinces could break through the protective barriers built around the city, they said.

In the provinces of Uthai Thani, Chai Nat, Sing Buri, Ang Thong, Suphan Buri, Ayutthaya, Pathum Thani and Nonthaburi, heavy rains caused rivers to overflow, with the water rushing where Bangkok lies.

Considered as Thailands worst in 50 years, the floods have swept across 60 of the countrys 77 provinces over past two months, killing at least 281 people and shutting down production at hundreds of factories, according to media reports.

The Thai economy is forecast to grow at 3.5% in 2011, barely half the pace of expansion recorded last year, according to the International Monetary Funds latest World Economic Outlook report in September.

With the devastation being wrought by the flooding, the projected slow GDP growth could be shaved by 0.6-0.9%, with the losses likely to be as high as baht (Bt) 80bn ($2.58bn), according to estimates of government agencies.

Thailand is expected to sustain huge damage to its agricultural sector, estimated at Bt54bn ($1.7bn), according to DBS Vickers. For industries, the losses are forecast at Bt20bn; Bt9.8bn for trade, and; Bt5.7bn for tourism, the brokerage said.

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