Floods: Thai economy shrinks 2.8%

Floods & slow global economy led to shrinking Thai economy in last 3 months of 2011. Exports in November fell by 12.4%, the worst in 2 years.

Photo of flood garbage on the side of the street waiting to be cleared away. Furniture and home repair purchases (home refurbishment) are likely to jump in the near future.

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ECONOMY: Q4 contraction blamed on lower exports by Wichit Chantanusornsiri

The Finance Ministry is reporting a 2.8% contraction in the economy for the fourth quarter on the worst floods in 69 years coupled with the sluggish global economy. 

Somchai Sujjapongse, director-general of the Fiscal Policy Office, said a contraction of 12.4% in November exports, the worst showing in two years, will be the main factor in the fourth quarter's overall poor performance. 

Production output also contracted by 3.5% in both October and November. 

Dr Somchai said the full-year gross domestic product (GDP) projection has been revised down to 1.7%. 

The budget deficit for fiscal 2012 has been raised to 400 billion baht.

However, economic growth will rebound rapidly to 5% next year thanks to a planned huge capital injection by the government to stimulate consumption, he said.

As well, state banks will loan 325 billion baht to the private sector, and the government's "New Thailand" public investment plan is aimed at national
post-flood rehabilitation.

Meanwhile, home refurbishments and industrial machinery repairs are expected to be costly.

Some economists predict the government will need a special decree to facilitate loans worth 200 billion baht for a flood prevention system.

The World Bank said the floods cost Thailand 1.36 trillion baht - 660 billion in damaged assets and 700 billion in opportunity and business losses.

The agency predicts this will shave 1.2 percentage points off the GDP forecast, coming in at 2.4% for the year.

It formulated the damage and loss estimates after looking at data on infrastructure, production, public welfare and the environment.

(Source: Bangkok Post, ECONOMY, Q4 contraction blamed on lower exports, 26/12/2011, Wichit Chantanusornsiri, link) 

Economics Vocabulary

contraction - decreasing in size, shrinking, growing smaller
economic contraction - when the economy grows smaller (not larger as it usually does)
contraction in the economy - same
Q4 - fourth quarter, 4th quarter, the last three months of the year 

Q4 contraction blamed on lower exports

sluggish - moving slowly อย่างช้า moving much slower than usual ซบเซา not performing or reacting as well as usual (เศรษฐกิจ) ที่ซบเซา
global - all over the world, including the whole world; throughout the world ทั่วโลก
sluggish economy - an economy in which business is moving slowly: sales low, incomes low, growth low, .... etc
sluggish global economy - business in all the economies of the world is moving slowly

the Finance Ministry is reporting a 2.8% contraction in the economy for the fourth quarter on the worst floods in 69 years coupled with the sluggish global economy

factor - a fact or situation which influences the result of something ปัจจัย
performance - how well or badly something works (or whether an investment provides a reasonable return)

a contraction of 12.4% in November exports, the worst showing in two years, will be the main factor in the fourth quarter's overall poor performance

contracted - became smaller, shrunk
production output also contracted by 3.5% in both October and November

domestic - within the country ภายในประเทศ
gross domestic product (GDP) - the total value of all the goods and services produced by a country in one year

projection - a calculation or guess about the future based on information that you have การคาดคะเน
gross domestic product (GDP) projection - the GDP amount that experts expect in the future

revised - change, rewritten and improved เปลี่ยนแปลง
the full-year gross domestic product (GDP) projection has been revised down to 1.7%

budget - the amounts of money that an organisation has available to spend on different things during a period งบประมาณ (See Wikipedia)
deficit - when you spend more than you receive (has to be financed or funded by borrowing)
budget deficit - when the spending in the budget for the year is greater than money received (revenue, income), so the deficit must be financed by borrowing

fiscal - related to government spending; connected with the government budget, i.e., public money เกี่ยวกับงบประมาณ
fiscal 2012 - the calendar year used by the government for budgeting and measuring spending
budget deficit for fiscal 2012

the budget deficit for fiscal 2012 has been raised to 400 billion baht

rebound - rise again after falling การฟื้นตัวของเศรษฐกิจ start increasing again, after decreasing (ค่าขนส่ง) เพิ่มขึ้นอีกครั้ง หลังจากมีการปรับลดราคาไป

capital - money invested in a business (See glossary)
injection - putting a liquid, especially a drug, into a person's body using a needle and a syringe การฉีดยา
capital injection - investing money in a business

stimulate - cause increased activity; encourage activity, growth, and development กระตุ้น (See glossary)
consumption - money spent by households and families on goods and services (See Wikipedia) การบริโภค
stimulate consumption - do something to make people and families spend more money (to get the economy moving again after a downturn)

economic growth will rebound rapidly to 5% next year thanks to a planned huge capital injection by the government to stimulate consumption

state - government รัฐ
state banks - banks owned and operated by the government

loan (noun) - an amount of money that a person, business, or country borrows, especially from a bank เงินกู้
X loans Y Z (verb) - X gives Y an amount of money Z to use for a period of time 

sector - a part of the economy ภาคเศรษฐกิจของประเทศ (public sector = government, private sector = all businesses, household sector = families and consumers, banking sector,...) (See Wikipedia)
private sector - all the businesses in an economy

investment - taking your money and putting it into projects to make a profit or earn interest (buying stock shares, bonds, real estate)
rehabilitation - 1. improve condition so that it can operate again; the process of making normal again after suffering injury or harm; 2. making a system, building, etc., suitable for use again, i.e., bringing it back to a good condition การฟื้นฟูสภาพกิจการ; 3.  the process of returning someone or something to a good or healthy condition, state or way of living การทำให้กลับสู่สภาพเดิม, การทำให้กลับมาดีเหมือนเดิม

public investment plan
national post-flood rehabilitation

state banks will loan 325 billion baht to the private sector, and the government's "New Thailand" public investment plan is aimed at national
post-flood rehabilitation.

refurbish - to clean and decorate a building or room and make it more attractive and better equipped

home refurbishments - people rebuilding and buying new things for their homes (such as furniture) after damage by the floods
expected - believe will happen คาดว่า (จะเกิดขึ้น)
home refurbishments and industrial machinery repairs are expected to be costly

predict - to say that an event or action will happen in the future, especially as a result of knowledge or experience คาดการณ์ว่า พยากรณ์จากสถิติว่า
decree - an official order or decision made by the ruler of a country

facilitate - help, make it easier for project to achieve goals ทำให้ง่าย to make it possible or easier for something to happen ทำให้สะดวกขึ้น
prevention - the act of preventing something, or things that people do in order to prevent something

some economists predict the government will need a special decree to facilitate loans worth 200 billion baht for a flood prevention system.

assets - things owned, especially property and money สินทรัพย์ สิ่งที่มีคุณค่า
opportunity - a situation when it is possible to do something that you want to do โอกาส (See glossary)

the World Bank said the floods cost Thailand 1.36 trillion baht - 660 billion in damaged assets and 700 billion in opportunity and business losses 

forecast - a statement about what will happen in the future based on information available now พยากรณ์
shave off - reduce
the agency predicts this will shave 1.2 percentage points off the GDP forecast, coming in at 2.4% for the year.

estimates - guesses of what the size, value, amount, cost, etc. of something might be การประมาณค่า
data - facts or information used for making calculations or decisions ข้อมูล
infrastructure - the high-cost facilities that everyone in the economy shares (water, roads, electricity, trains) สาธารณูปโภค
welfare - 1. living in good conditions (with health, wealth, and happiness) ความสะดวกสบาย, ความมีสุขภาพดี, 2. help given, especially by the state or an organization, to people who need it; good care and living conditions สวัสดิภาพ
environment - the natural world of land, sea, plants, and animals

it formulated the damage and loss estimates after looking at data on infrastructure, production, public welfare and the environment.