DEPUTY Finance Minister Julapun Amornvivat said today (April 1) while Friday’s earthquake at Mandalay, Myanmar, with severe tremors felt in Thailand is unlikely to affect the Thai economy in the medium- to long-term there will be an impact in the short term, especially the property market, TV Channel 7 said today (April 1).
He admitted that property buyers’ confidence had eroded in the short term although this will not affect this year’s Gross Domestic Product (GDP) with the ministry maintaining its target of 3%.
The Finance Ministry has implement three measures to deal with the earthquake’s effect on the country with one being instructing the Comptroller General’s Department to release 200 million baht to the Department of Disaster Prevention and Mitigation (DDPM) from reserve funds, approved a loan measure for financial institutions and instructed the Insurance Commission to expedite compensation for houses and people who have insurance.
The collapse of the State Audit Building will not lead to liquidity problems because it has been insured with four companies with the risk spread overseas.
The Comptroller General’s Department will also look at details of compensating quake victims but as there is no previous criteria the payout made during 2004’s devastating tsunami disaster will be used as a yardstick before submission to the cabinet for approval.
Meanwhile Kasikorn Research Centre said it initially estimates quake damage at approximately 20 billion baht with property and tourism sectors directly impacted in the short term.
Regarding overall effect on the economy, this incident may reduce this year’s GDP by -0.06% and if the US imposes an additional 25% tariffs on Thai products tomorrow it could further reduce GDP by -0.3%.
Financial institutions too face risks over fragile debt quality while Bank of Thailand may cut its benchmark interest rate earlier than expected with there being an opportunity to do so at this month’s meeting. Kasikorn Research has set this year’s policy rate target at 1.75% after this was cut by 0.25% to 2% on February 26.
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Deputy Finance Minister Julapun Amornvivat and the rubble of the collapsed State Audit Building. Photo: Amarin TV
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