1.7% fall in growth, flood prevention investments financed with overseas borrowing, longer debt repayment periods for flood hit companies.
FLOODING: Cost of deluge estimated to be 'massive', Govt looking to borrow heavily from overseas by Chatrudee Theparat & Parista Yuthamanop
The massive flooding will reduce the country's economic growth by up to 1.7 percentage points the government said yesterday.
The government is planning to obtain overseas loans of up to 500 billion baht to finance flood prevention projects.
Finance Minister Thirachai Phuvanatnaranubala said the floods this year have been especially severe. Although damage evaluation is still not clear as the flooding is far from over, the National Economic and Social Development Board (NESDB) and the Bank of Thailand have initially estimated the disaster would affect economic growth this year by 1 to 1.7 percentage points.
The impact might be larger than this if the situation is beyond our control for a long time but if it is under control and restoration is fast, the impact could be restricted at this level," he said after the economic ministries discussion on the flood impact yesterday.
A government source said the NESDB reported that the agency has cut the economic growth projection to 2.1% from an earlier prediction of 3.8%.
In the first and second quarter of this year, economic growth was at 3.2% and 2.6% respectively.
The agency earlier forecast growth of 4.2% in the third quarter and 5% in the last quarter but the agency cut the projection to 3.7% for the third quarter.
Deputy Prime Minister Kittiratt Na-Ranong, who chaired the meeting, said the government needs to borrow billions from overseas to finance flood prevention projects as the existing budget is not enough for long-term investment.
Mr Kittiratt did not give a specific amount of the budget involved but a source said it could go up to 500 billion baht.
"We cannot allow this country to go through these problems again, thus we need to borrow from overseas," he said.
However, he said issuing the government bill to obtain the overseas loans is not an urgent task
The Finance Ministry will seek cabinet approval to increase the budget deficit by 50 billion baht to finance flood restoration. This will raise the rehabilitation budget to 130 billion baht.
NESDB secretary-general Arkhom Termpittayapaisith said the damage cost to four industrial estates and one industrial zone in Ayutthaya, excluding the Nava Nakorn Industrial Estate in Pathum Thani, is approximately 120 billion baht while the damage to the farm sector is about 40 billion baht.
The floods have affected 252,716 workers in all sectors. He said floods would cause four industrial estates and one industrial zone in Ayutthaya to lose revenue of 350 billion baht.
Bank of Thailand governor Prasarn Trairatvorakul also revised his damage projection.
"The flood damage should be more than 100 billion baht from previous estimations as the situation is worsening. We expected the damage to keep on expanding," he said.
Dr Prasarn said Thailand's flood crisis won't have a significant impact on the Thai banking industry. Debt owed to banks by operators of five industrial estates affected by the floods amounted to 60 billion baht, or 0.75% of total lending. The central bank has asked commercial banks to help the companies by extending debt repayment periods.
Mathee Supapongse, a central bank senior economist, said the Monetary Policy Committee meeting tomorrow would see the floods and global economic slowdown as two key factors to affect the economy into the next year.
(Source: Bangkok Post, FLOODING: Cost of deluge estimated to be 'massive', Govt looking to borrow heavily from overseas, 18/10/2011, Chatrudee Theparat & Parista Yuthamanop, link)
Economic Cost of Floods Vocabulary
deluge - very heavy rain causing floods
cost of deluge - the cost of flooding
situation is beyond our control - we cannot control events, we cannot control what is happening
situation is under control - we are controling events now, we are now controling what is happening
restore (verb) - to bring something back to its initial or original condition
restoration (noun) - the act of bringing something back to its original condition
original - something that existed at the beginning (of some process)
initial (adjective) - the first, at first, at the beginning
initially (adverb) - at first; at the beginning ในเบื้องต้น ในระยะต้น
initially estimated - what they first thought the amount would be
rehabilitation - making a system, building, etc., suitable for use again, i.e., bringing it back to a good condition การฟื้นฟูสภาพกิจการ the process of making normal again after suffering injury or harm; the process of returning someone or something to a good or healthy condition, state or way of living การทำให้กลับสู่สภาพเดิม, การทำให้กลับมาดีเหมือนเดิม
rehabilitation budget - money to be spent on repairing the damage caused by the floods
massive - very large in size, amount or numberใหญ่โต มหาศาล
massive flooding - very large amounts of water flooding places
finance - to provide money for something จัดหาเงินทุนให้
prevention - actions or projects to stop bad things happening in the future
overseas loans to finance flood prevention projects
severe - very serious and worrying ที่รุนแรง ที่น่าเป็นห่วง
floods this year have been especially severe
clear - easy to understand
damage evaluation is still not clear - they don't know how big the damage will be, in the future
the flooding is far from over - the floods will continue for a long time
disaster - something very bad that happens and causes a lot of damage ความหายนะ ภัยพิบัต
impact - an effect or influence ผลกระทบ
restricted - limited or controlled ซึ่งถูกยับยั้ง, ซึ่งถูกควบคุม
source - someone who gives information แหล่งข่าว
A government source said... - a person within the government giving information to the newspaper, said ...
projection - a calculation or guess about the future based on information that you have การคาดคะเน
cut the projection to 3.7%
economic growth projection - a calculation or guess about what economic growth will be in the future
cut the economic growth projection - reduce what they believe economic growth will be
forecast - a statement about what will happen in the future based on information available now พยากรณ์
quarter - three months of the year on the calendar of governments and companies
earlier forecast growth of 4.2% in the third quarter
meeting - when a group of people come together to discuss issues and make decisions การประชุม
chaired the meeting - lead the meeting, supervised or managed the meeting
budget - the amounts of money that an organisation has available to spend on different things during a period งบประมาณ (See Wikipedia)
investment - taking your money and putting it into projects to make a profit or earn interest (buying stock shares, bonds, real estate)
the government needs to borrow billions from overseas to finance flood prevention projects as the existing budget is not enough for long-term investment.
issuing - officially giving something to people ออกคำสั่ง
bill - a written document containing a proposal for a new law ญัตติ
issuing the government bill to obtain the overseas loans
urgent - must be done quickly; needing to be dealt with immediately ที่เร่งด่วน
task - a piece of work that someone does หน้าที่; ภารกิจ
urgent task - something action that must be done quickly
approval - official permission การอนุมัต
deficit - not enough income to cover expenses; when you spend more than you receive (have to borrow to cover deficit; has to be financed or funded by borrowing)
budget deficit - government budget deficit, when money spent (going out) is greater than revenues (taxes coming in)
The Finance Ministry will seek cabinet approval to increase the budget deficit by 50 billion baht
industrial estates - a special area for factories, with that special infrastructure needed such as electricity, transportation, water, waste disposal, etc (See Wikipedia)
industrial zone - same as "industrial estate" (but may be bigger)
sector - a part of the economy ภาคเศรษฐกิจของประเทศ (public sector = government, private sector = all businesses, household sector = families and consumers, banking sector,...) (See Wikipedia)
farm sector - all the farms and farmers in the country
revised - changed and improved, written again for a second time เปลี่ยนแปลง
revised his damage projection - change what they believe damage will be in the future
revenue - income from taxes or business activities รายได้
floods would cause four industrial estates and one industrial zone in Ayutthaya to lose revenue of 350 billion baht.
expected - believe will happen คาดว่า (จะเกิดขึ้น)
We expected the damage to keep on expanding - we believe the damage will grow, get bigger and bigger ...
crisis - an urgent, difficult or dangerous situation วิกฤต วิกฤตการณ์
flood crisis - when massive flooding creates an urgent, difficult and dangerous situation
significant - large enough to be important or have an effect ที่สำคัญยิ่ง
significant impact - has a big and important effect
debt - an amount of money that you owe หนี้
operators - companies doing some business
Debt owed to banks by operators of five industrial estates affected by the floods amounted to 60 billion baht
lending - giving money to someone who agrees to pay it back in the future การให้ยืม
central bank - the main government bank in a country, that issues currency and conducts "monetary policy" to control the supply of money and credit in the economy and over the long-term the inflation rate (See Wikipedia)
commercial - for business purposes
commercial banks - banks that serve business and individuals (See Wikipedia)
debt repayment - when a borrower pays a loan back to the lender
extending debt repayment periods - allowing the borrower to pay the loan back over a longer period
global - throughout the world ทั่วโลก ทั้งโลก all over the world, including the whole world
global economic slowdown - when all the big economies and then smaller economies around the world slow down, with less business, less income, more business failures, declining stock markets, etc, in bad cases can become a recession
key - important สำคัญ
factors - one of the things that effects a situation or event ปัจจัย
key factors - import things that have an effect on a situation (determine what will happen in the situation; determine the future)
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