As Thailand Floodwaters Rise, Economic Fortunes Wane

Posted October 28th, 2011 at 1:25 pm (UTC-5)
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As the floodwaters rise in Thailand, its economic fortunes are diminishing.

The Bank of Thailand said Friday the flooding that is now inundating the capital, Bangkok, has a “severe and widespread” economic impact. The central bank said the flooding is affecting both the country's agricultural and industrial interests. The bank projected that the flooding will sharply cut Thailand's economic growth this year, dropping it from an earlier prediction of 4.1 percent down to 2.6 percent.

The government says the flooding has already swamped nearly 10,000 factories, leaving 660,000 workers in danger of losing their jobs. One financial services firm, Moody's Investors Service, says the damage from the disaster could total $6.6 billion, the equivalent of 2 percent of the national economy.

Thailand is a major Southeast Asian industrial hub, producing 60 percent of the world's computer hard-disk drives. Japanese automakers rely on the country for production of a variety of parts, particularly electronic components.

But with the flooding, Toyota, one of the world's biggest automakers, said earlier this week that it has had to adjust production at some of its plants in Japan because Thai-produced parts were in short supply.