Severe flooding ravaging 12 southern provinces is expected to trim 1.2 percentage points off the region's economic growth of 3.2% forecast earlier, according to the University of the Thai Chamber of Commerce (UTCC).
Vachira Kunthawethep, a UTCC economist, said the university estimates that 22.4 billion baht worth of damage was incurred from heavy flooding that hit 12 provinces between Jan 1-10.
Of the total damage, 3.40 billion baht is estimated to infrastructure such as roads, rails, bridges and homes; 8.1 billion baht to agriculture; and 10.9 billion baht to businesses and industry, mainly small and medium-sized enterprises.
The damage is expected to cut the southern region's GDP to only 2% growth from earlier-projected 3.2% expansion.
The southern region accounts for about 8.6% of the country's GDP. Last year, the regional GDP was estimated at 1.13 trillion baht, up 2.9% from a year before.
Mr Vachira urged the government and responsible agencies to step up working out remedy measures not only for affected individuals, but to aid businesses and stimulate local consumption.
Mr Vachira suggested the government set aside some of the additional 100 billion baht from the mid-year budget for local development of the 18 clusters of provinces to help rebuild the wrecked South and restore confidence both to investors and tourists.
The Commerce Ministry said on Wednesday around 68% of business operators in the South with a combined commercial value of 100 billion baht have been affected by the floods.
About 43,000 businesses have borne the brunt to varying degrees, according to a Department of Business Development survey. Those affected include retail and farm businesses.
Nonetheless, Mr Vachira predicted the impact from the flooding on the country's overall GDP is estimated at only 0.1%, which is deemed insignificant.
The UTCC still maintains its economic growth forecast at 3.6% this year, as the government's massive spending on infrastructure projects and improving exports is expected to help offset the losses incurred from flooding in the South.
The UTCC forecast Thailand's export to growth in a range of 1.3-4.2% this year to US$218-224 billion (7.75-8 trillion baht). That estimate is based on economic growth of 3.1% globally, 6.6% in China and 1.7% in the EU, with the baht trading at 36-37 to the US dollar.
The centre estimates that Thai exports in 2016 eked out marginal growth of 0.5% to $215.5 billion.