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Flooding Bangkok

October 28, 2011 by staff 

Flooding Bangkok, Thailand’s central bank on Friday cut its economic growth forecast for this year reign as the reel industry and farmers of the country’s worst floods in recent decades.

The Bank of Thailand expects the economy to grow just 2.6 percent in 2011, below its previous forecast of 4.1 percent, according to its quarterly report.

“The widespread flooding, affecting not only agricultural production but manufacturing activity is likely to weigh on growth in the fourth quarter substantially,” he said.

The bank may further lower its projection, if the situation worsens, especially if flooded inside Bangkok, assistant governor Paiboon Kittisrikangwan told reporters.

Thailand’s deadly three-month flood crisis has disrupted economic activity and domestic demand weakened, the bot, he said, while global economic problems are expected to weigh on exports.

Flooded thousands of factories have been forced to close in Thailand in recent weeks, putting more than half a million people out of work temporarily.

Car Parts and hard drive manufacturers drive producers have been particularly affected.

For 2012, the bank expects the Thai economy grows by 4.1 percent in the back of a recovery in domestic demand will help offset slowing exports.

The bank also revised down its inflation forecast for 2011 to 3.8 percent from 3.9 percent. That kept its forecast for underlying inflation at 2.4 percent.

Thailand, whose economy rebounded strongly in political violence last year, has kept its interest rate at 3.5 percent since August to boost growth, pausing after a series of hikes to curb inflation.

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