Thailand’s budget deficit would be far higher than planned because of the worst flooding in 50 years, the government said yesterday, as people in Bangkok were told not to drop their guard even if the immediate danger to the capital had passed.
Flooding in the north, northeast and center of the country has killed at least 315 people since July, damaged large areas of farmland and closed huge industrial estates this month.
The Cabinet approved an increase in the budget deficit to 400 billion baht (US$13 billion) for the fiscal year from Oct. 1, up from the initially agreed 350 billion baht, Thai Industry Minister Wannarat Channukul told reporters.
Thai Deputy Prime Minister Kittirat Na Ranong said the government would look at ways to borrow “several hundreds of billions of baht” to fund the recovery effort. He did not go into details.
“The Cabinet assigned the finance minister and me to issue a law for the big borrowing,” he said.
Thai Prime Minister Yingluck Shinawatra has said spending on reconstruction could amount to more than 100 billion baht. The cost could go far higher if Bangkok, which accounts for 41 percent of GDP, is hit by floods.
Monsoon rain, high tides and water flowing down from reservoirs in the north had threatened the capital at the weekend, but its defensive system of dikes and canals held.
However, Bangkok Governor Sukhumbhand Paribatra warned the danger was not completely over and that districts in the north of the capital could still face problems over the next 48 hours.
“We don’t want to cause any panic among Bangkokians,” he told a press conference late on Monday. “However, if you want to move valuables or electrical equipment to higher ground for safety reasons, that would be good.”
Residents have complained about contradictory noises from city and government officials, including an evacuation warning in a northern suburb last week that proved to be a false alarm.
There were conflicting signals about the danger to the Nava Nakorn industrial estate north of Bangkok, which has 270 plants and about 270,000 workers, until the government told firms to halt operations on Monday as floodwater breached its walls.
Hiroshi Minami, head of the local unit of Japanese chipmaker Rohm Co Ltd, said the government did not appear to have learned from its experience at other industrial estates.
“We needed early warning,” he said yesterday, adding that Rohm customers around the world would suffer.
Reporters said production appeared to have halted at the estate and workers were trying to protect their factories. An army official said at least 10 percent was under water.
CP All PCL, the country’s biggest convenience store operator under the 7-Eleven brand, said it had closed about 150 outlets, up from 70 last week, and shut a distribution center in Nonthaburi Province.
The government is pushing ahead with a big increase in the minimum wage despite the huge bill companies face to restart their operations once the waters subside.
Yingluck’s Puea Thai Party had promised 300 baht a day in its campaign for the July election, a commitment industry said would be ruinous and economists said would fuel inflation.
Government, employer and worker representatives came up with a compromise of sorts on Monday, agreeing to a big 40 percent rise that would still leave the minimum wage below 300 baht in most provinces. The rise has also been pushed back to next April from January because of the flooding.
However, the 300 baht minimum will apply in Bangkok and six other relatively well-off provinces, including tourist island Phuket.
That wage is five times higher than the minimum in Vietnam and 2.5 to 4.6 times that in Indonesia, according to the Kasikorn Research Center.
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