Bangkok:The recent widespread flooding in Bangkok and major cities in Thailand's North and East has caused severe damage to property and livelihoods, exacerbating existing economic challenges. Associate Professor Dr. Kiatianan Luangkaew from Thammasat University analyzed the situation, noting that the floods have worsened existing economic issues, creating a phenomenon of "receding water, emerging debt" that could affect the Thai economy into the following year.
According to Thai News Agency, Dr. Kiatianan explained that the floods have resulted in two major debt issues: resurfacing of existing debts and the creation of new debts for survival. Many affected individuals, lacking insurance, face difficulties restoring damaged properties, which include essential items like houses and cars. Personal loans, mortgages, and car loans are reappearing as burdens, while new loans are being taken out, often leading to reliance on high-interest informal debt.
The economic impact makes it difficult for Thailand to achieve a 2% GDP growth this year. The Thai Chamber of Commerce estimates flood damages at approximately 0.03% to 0.11% of GDP, with Bangkok alone suffering damages valued at around 7,014 million baht. These challenges are seen as re-aggravating old economic wounds, complicating recovery efforts, and threatening to extend economic struggles into the next year.
Dr. Kiatianan highlighted the inadequacy of Thailand's preparedness for such disasters, attributing 70% of the responsibility to government shortcomings and 30% to public attitudes towards disaster risks. As the world enters an era of "poly-uncertainty" with overlapping crises, he stressed the need for integrated crisis management approaches.
To support Thai businesses, Dr. Kiatianan proposed strategies for SMEs, including risk diversification through insurance, developing emergency plans, and creating Business Continuity Plans (BCPs). He also recommended government policy measures such as shifting away from cash handouts, implementing wage subsidies, providing tailored assistance, and enhancing the agricultural sector's resilience to climate change.
This flood crisis serves as a critical reminder for all sectors to adapt to new risks and uncertainties, focusing on sustainable economic strategies and preparedness.