Thai economy could face 36 billion baht hit from extreme weather

Photo: Flickr (Weeraphon Suriwongsa)

Extreme weather conditions, including drought and floods, could potentially inflict a 36 billion baht blow to Thailand‘s economy this year, warns the Joint Standing Committee on Commerce, Industry and Banking (JSCCIB). Drought, in particular, is a significant concern as it may severely affect the agricultural and manufacturing sectors, further hindering the country’s already sluggish exports.

“Manufacturers are worried about drought because it can reduce production capacity and affect exports,” said Kriengkrai Thiennukul, chairman of the Federation of Thai Industries (FTI), which is part of the JSCCIB.

Commerce Ministry data reveals that Thai exports decreased by 5.2% year-on-year to US$92 billion in the first four months of 2023, while imports fell by 2.2% to US$96.5 billion, resulting in a trade deficit of US$4.51 billion.

The JSCCIB submitted a proposal to the Prime Minister on May 31, seeking collaboration with the government to tackle the drought and mitigate its severe impacts. The business sector urges authorities to devise mid-term and long-term solutions to ensure investment projects, particularly those in the Eastern Economic Corridor (EEC), can continue operating. The EEC area is home to 12 S-curve industries expected to drive Thailand’s economy.

Kriengkrai stated that businesses have developed risk management plans to deal with drought and flood issues. In the manufacturing sector, companies are implementing 3R measures – reducing, reusing, and recycling water – to guarantee sufficient water supply for production processes. Additionally, companies are promoting the adoption of innovative technologies among farmers to help them conserve water resources.

However, Kriengkrai emphasised that the government should play a crucial role in addressing drought and flood-related challenges in the long term. The FTI has requested the government to consider suggestions drafted by the Water and Environment Institute for Sustainability under the FTI. These suggestions include preparing water pumps, diverting water from specific areas, accelerating the construction of the Khlong Wang Tanod Reservoir, and revising the 20-year water resource development plan to better manage drought over the next one to three years.

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Alex Morgan

Alex is a 42-year-old former corporate executive and business consultant with a degree in business administration. Boasting over 15 years of experience working in various industries, including technology, finance, and marketing, Alex has acquired in-depth knowledge about business strategies, management principles, and market trends. In recent years, Alex has transitioned into writing business articles and providing expert commentary on business-related issues. Fluent in English and proficient in data analysis, Alex strives to deliver well-researched and insightful content to readers, combining practical experience with a keen analytical eye to offer valuable perspectives on the ever-evolving business landscape.