Central Europe’s recent floods looked dreadful on television. And they will have scarred the memories of the people who were hit the hardest. But the economic effects will be limited thanks to the solid defences put in place since the last flood a decade ago.
So says Erste Bank, which argues that while the floods were similar in scale to those of 2002, the costs for Austria, the Czech Republic, Slovakia and Hungary, will be a small fraction of 2002′s €6bn. Continue reading »
The Czech authorities have declared a national emergency following days of heavy rains that have left up to five people dead and several towns in the south and west of the country under water.
A rising tide of milky-coffee-coloured water in the River Vltava is threatening to spill over into the historic centre of the capital Prague and tourism officials are already beginning to estimate the potential losses to a washed out season. Continue reading »
While Jakarta struggles with floods this week, its stock market is hitting record highs.
Of course, there is no direct connection between the water washing through the streets and the financial flows in the equity market. Even the links to overall economic growth are fairly remote. But the floods are a painful reminder of the growing pains of emerging markets – pains which can make themselves felt if Indonesian citizens ever decide that the authorities aren’t doing enough to address the country’s many infrastructure gaps. Continue reading »
Thai exports last month posted their biggest increase in over a year as the country’s factories recovered from floods and global demand picked up after a sluggish summer.
Even so, the 15.6 per cent rise fell short of expectations as economists had pencilled in 20 per cent. That gives the central bank a little more reason to cut rates when it meets on Thursday, though most forecasters still expect the Bank of Thailand to leave rates unchanged at 2.75 per cent following last month’s surprise reduction. Continue reading »
A mere eight months since flood waters receded from Thailand’s capital, there is once again fear in the Kingdom that history is being repeated.
Last year the World Bank estimated that the cost to Thailand’s economy of severe flooding was approximately 1.4tn baht ($46bn). In the last few days, much of the north of the country has been inundated and as high water advances towards Bangkok the government has issued warnings to urban residents. Continue reading »
Another south east Asian economy has performed well despite the global slow down. Following Indonesia and Malaysia, Thailand on Monday reported stronger-than-expected second quarter GDP, with a 3.3 per cent increase over the first three months.
As elsewhere in the region it is the domestic economy that is powering ahead, in Thailand’s case driven by recovery and reconstruction following last year’s floods: the April-June figure following record growth of 10.8 per cent q-onq in the first quarter. Continue reading »
A bit of good news for flood-hit Thailand. Exports rose unexpectedly last month for the first time since the floods struck in October. After three months of decline, exports were up, albeit only by 0.9 per cent, according to figures published on Wednesday.
But the relief may be short-lived since industrial production in February was down 3.4 per cent, the sixth month in a row, with less than half of the plants in flood-hit districts back in production. Don’t expect a return to normal production for at least another six months, is the word from Bangkok. Continue reading »
What a shocker. Thailand’s GDP shrank 10.7 per cent in the fourth quarter – way more than the 5 per cent predicted by most economists. Major flooding – which caused many factories in the Bangkok area to shut down for months – was the reason.
But it isn’t all bad news. A terrible Q4 should lead to a much brighter 2012. Continue reading »
The Bank of Thailand surprised nobody with its 0.25 percentage point cut on Wednesday, reducing its one-day bond repurchase rate to 3 per cent.
With the country struggling with the effects of the worst floods in more than 60 years as well as the same global challenges now faced by other Asian exporters, the central bank had little choice. That makes Thailand the fourth Asian country to ease monetary policy – in some form – in the last week, following the Philippines, Indonesia and India. Continue reading »