Thailand's central bank governor says he is optimistic the country's economy will recover in early 2012 from the floods still threatening Bangkok. The governor's upbeat outlook comes as government authorities discuss multi-billion-dollar recovery and reconstruction plans.
Thailand's most severe floods in 50 years have now claimed 437 lives, affected more than three million households across three quarters of the country's provinces. The estimated financial damage is already in the billions of dollars. The waters have so far inundated almost 10,000 factories, including several industrial estates, north of the city with loss of 660,000 jobs.
While the pace of the inundation has slowed in Bangkok, millions of cubic meters of often fetid water is still advancing to the financial and business districts.
Despite the damage and ongoing concern in Bangkok, Thai central bank governor Prasarn Trulratvorakul says economic recovery is possible if the waters recede by early December and domestic spending is revived.
Speaking to journalists, Prasarn expects private consumption to lead the rebound in early 2012.
"We still believe there will be recovery next year provided that the flood situation starts to improve by early December," said Prasarn. "We should see Thailand staging a respectable comeback on the back of domestic demand revival. I would like to stress again that Thailand's fate will depend upon her success in reviving domestic demand."
The floods have led the central bank to slash Thailand's expected annual growth rate by half to 2.6 percent. The World Bank expects the Thai economy to contract in the final quarter by close to two percent.
Hard-hit factories outside Bangkok account for almost 20 percent of national industrial production.
Vikas Kawatra, head of institutional broking at Kim Eng Securities, says reviving the industrial sector should be a government priority.
"Broadly speaking the priorities should be first to fix the industrial sector so factories can start resumption of work and then comes the next step of making sure that this doesn't repeat, doesn't happen," said Kawatra. "It's a long term process."
Agriculture production in the country's central plains has also been affected. The Rice Exporters Association expects rice exports to fall because of logistical problems in flooded areas. There are also concerns that as much as a quarter of the rice crop could be affected.
For now, tens of thousands of people are already dependent on food and water handouts.
Aid workers and politicians visiting flood-hit areas are met by crowds of anxious people.
This week local businessman Somchai Pattanont traveled by boat along the Chao Phraya River to deliver aid to monks at a temple. Somchai fears it may take two years to recover.
"The country is in for trouble for a long, long time, about one or two years," said Pattanont. "Many factories of the foreign factory [owners] are destroyed, [the floods] destroyed many factories. So [in] one or two years everything will be better. [But] the people upcountry, upcountry [everything] is destroyed. No money, no food, no rice, trouble. The government will have to pay a lot of money, a lot."
For now, Thai authorities are still focused on the short term challenge of draining the enormous pool of water north of Bangkok into the Gulf of Thailand.