Oct. 13 (Bloomberg) -- Thailand said floods that have killed more than 283 people and hurt exports may last until the month’s end, swamp Bangkok and cut deeper into economic growth.
“The damage hasn’t stopped,” Deputy Prime Minister Kittiratt Na-Ranong said today. “It has spread widely. The government and all agencies involved are working to limit damage to the manufacturing sector and the economy.”
The three-month-old crisis has submerged towns and rice fields, forced companies including Toyota Motor Corp. to shut factories and prompted forecasters to slash estimates for Thai economic expansion. Bangkok’s 9.7 million residents are hoarding rice, instant noodles and bottled water, and buying sandbags as they prepare to protect their homes.
A “huge amount of water” flowing from northern provinces and peak tides predicted from Oct. 14-17 and Oct. 28-31 will test barriers defending the capital, according to the government’s flood center.
Costs are likely to rise from an earlier estimate that indicated the disaster may pare economic growth by 0.6 percentage points to 0.9 percentage points, Kittiratt said.
The damage bill may rise to 156.7 billion baht ($5.1 billion) and curb growth by 1.3 percentage points to 1.5 percentage points, the University of the Thai Chamber of Commerce said today.
The university, a private institution established by the chamber, now expects the economy to grow by 3 percent to 3.5 percent this year. Consumer confidence declined to a four-month low in September, a separate report showed today.
“Don’t underestimate the floods,” Energy Minister Pichai Naripthaphan said yesterday in an interview. “Anything can happen with the power of water. We must be ready.”
Authorities yesterday used helicopters to drop food and emergency supplies to people still stranded in Ayutthaya province, where water has swamped World Heritage-listed temples and crippled operations of Japanese manufacturers including Nikon Corp. and Pioneer Corp.
Flooding has disrupted operations at 930 plants in 28 provinces, the Industry Ministry said in a statement yesterday. The waters have affected 61 of the nation’s 77 provinces.
In Nakhon Sawan, north of Bangkok, power was cut to the provincial capital of almost 100,000 people to avoid electrocutions as rising floodwaters forced residents to evacuate. That water will reach Ayutthaya between Oct. 14 and 17, when peak tides are expected, before flowing down the Chao Phraya river toward Bangkok, Pracha Promnog, head of the flood center, said yesterday.
“The central bank can help the economy by holding its key interest rate on Oct. 19,” Thanavath Phonvichai, an economist at the university, said today. “Consumer confidence is on a downtrend. If they can cut the key rate, that will help boost the economy next year.”
Thailand’s gross domestic product rose 2.6 percent in the second quarter from a year earlier, the slowest pace since 2009. A faltering world recovery also poses a threat to expansion.
In the capital, residents are grappling with conflicting government warnings, with Defense Minister Yuthasak Sasiprapa saying “no one can guarantee” Bangkok will be spared, while the national flood center said the city has a 90 percent chance of avoiding widespread damage.
“We can’t rely on the government,” said Siraporn Nikorata, a 37-year-old nurse who was buying 10 bags of rice from a Tesco Plc supermarket in the capital. “No one can guarantee what will happen to Bangkok. We have to take care of ourselves first. I need to protect my family.”
Prime Minister Yingluck Shinawatra yesterday urged food producers not to raise prices, as shoppers anticipating floodwaters emptied shelves at Tesco and Big C Supercenter Pcl stores in parts of Bangkok.
“People are suffering,” said Yingluck, who took power after her party won an election in July. “If you raise product prices, people will try to stockpile more food, which will create more problems.”
Authorities said shortages at some supermarkets were being caused by logistics issues and bulk purchases for flood relief rather than a lack of staple goods.
“We want to ask the public not to panic,” Permanent Secretary for Commerce Yanyong Phuangrach said yesterday.
Floods have cut road and rail links in some parts of the country, complicating efforts to transport goods, said Banyat Kamnoonwat, assistant vice president of CP All Pcl, which operates 6,002 7-Eleven outlets in the country.
Necessities including rice, water and instant noodles are still available, and the company has stored supplies to meet an expected increase in demand, he said yesterday by phone.
“When consumers see empty shelves, that intensifies worries and spurs hoarding,” Somchai Pornrattanacharoen, president of the Wholesale and Retail Association, said this week. “Increased production by some manufacturers isn’t enough to meet demand, and replenishing stockpiles usually takes one to three days.”
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