Thailand’s Persistent Flooding Crisis and Government Response
Thailand has long grappled with severe flooding, a recurring challenge that affects millions of households and disrupts economic activities, particularly in low-lying areas where such disasters are considered routine. Despite the government’s annual budget allocations for flood relief, the problem remains persistent, prompting calls for more sustainable, long-term solutions.
Every year, the government sets aside a substantial budget for flood relief. For example, last year, the Pheu Thai administration allocated over 8 billion baht, providing 9,000 baht to each affected household during the rainy season. In response to the current monsoon rains, the new Bhumjaithai-led administration has prepared a 6-billion-baht flood relief budget, also expected to provide 9,000 baht per household.
However, despite these efforts, flooding continues to be a major issue across the country. The private sector has emphasized the need for more comprehensive water management strategies beyond immediate relief measures.
Long-Term Plan Required
The ongoing floods have submerged vast tracts of land in many provinces, but they have not yet impacted factories. Nonetheless, the regular inundations raise concerns about the state’s long-term water management strategy, according to Kriengkrai Thiennukul, chairman of the Federation of Thai Industries (FTI).
“Thailand has been living with floods and droughts regardless of which administration is in power,” he said. The business sector has not seen a clear long-term water management plan from the government, leading businesses to rely on their own measures to brace for flooding.
There have been no reports of serious impacts on factories, as businesses have implemented disaster preparedness measures. However, many factory workers face indirect impacts, such as difficulties traveling between their homes and workplaces.
The floods this year have not prompted the Joint Standing Committee on Commerce, Industry and Banking to adjust its economic forecast. Earlier this month, the panel projected a GDP growth of 1.8-2.2% for the year, with export growth at 2-3% and inflation at 0.5-1%.
Industrial Estate Authority’s Efforts
The Industrial Estate Authority of Thailand (IEAT) is confident its industrial estates will not be affected by the floods due to protective measures. The IEAT spent 1.8 billion baht on developing and reinforcing flood protection systems, including the construction of flood walls. The authority focused on four industrial estates located in Nakhon Luang, Bang Pa-in, Ban Wa, and Bang Poo, which are prone to flooding.
As the Chao Phraya River runs through Ayutthaya, the province receives significant runoff from the north every year. Samut Prakan must also deal with rising water levels and high tides near the end of the year.
Crop Damage and Economic Impact
Rujipun Assarut, assistant managing director of Kasikorn Research Center (K-Research), estimated that Thailand’s rice production could lose 420,000 tonnes due to floods during September and October, which marks the start of the harvesting period for in-season plantation. Around 2.5 million rai of rice plantation area has been damaged this year, including several provinces in the central plains and parts of the northern and northeastern regions.
Compared to last year, accumulated rainfall has increased by 6%, attributed to a higher number of storms hitting the country in 2025. While the floods are expected to increase rice prices by 1-2% during the two-month period, higher supply in November and December from domestic sources and countries like India and Vietnam should help stabilize prices.
In terms of economic impact, Nuttaporn Triratanasirikul, deputy managing director of K-Research, noted that the floods would lower domestic consumption, particularly among farmers and people whose homes were inundated. These groups may reduce spending on other items to focus on home repairs.
Limited Impact on Output
Vinit Visessuvanapoom, director-general of the Fiscal Policy Office, stated that the floods have not significantly affected the country’s key industrial production base or the tourism sector. The impact on industry mainly concerns supply chain and logistics issues, particularly in the agricultural processing sector.
This year’s floods have affected 54 provinces, with 27 experiencing severe flooding. The agricultural sector suffered damage estimated at 590 million baht as of October 7. In 2011, Thailand faced severe floods that caused economic damage of 52 billion baht, equivalent to 0.46% of GDP at the time.
The government allocates a budget for water management annually. For fiscal 2025, the budget was 111 billion baht for over 3,000 projects, including the construction of water gates, weirs, irrigation canals, and embankment protection projects.
Under Pressure
Decha Siranaraset, president of the Nan Restaurant Business Club, highlighted the increasing frequency and severity of flooding in his province over the past two decades. He attributes this to climate change, citing more intense rainfall events, which he calls “rain bombs.”
In late July this year, Nan experienced some of the worst flooding in recent history, severely impacting the local economy, particularly the tourism and restaurant sectors. Many stores were unable to operate, and a significant amount of restaurant equipment was destroyed.
He urged the government to offer short-term relief measures, such as soft loans with low interest rates, while extending repayment terms for affected businesses. Additionally, he called for river and canal dredging to improve drainage.
We’ve Seen This Before
Duangrachata Payakvichien, president of the Thai Hotels Association’s central chapter, noted that cities like Ayutthaya are increasingly prone to flooding due to urbanization. She emphasized the need for an efficient flood warning system to allow locals and businesses to evacuate safely.
She also stressed the importance of adapting flood management infrastructure as cities develop. However, she noted that the recent floods should not significantly impact tourism, as they affected outer districts rather than historical sites and hotels.
Coping Admirably
Nattapon Dechasatsawat, chairman of the Sukhothai Chamber of Commerce, mentioned that most of the floods this year affected agricultural areas, reducing farmers’ purchasing power by 20-30%. Tourist arrivals decreased slightly, as some visitors believed the floods would affect the entire province.
He assured people outside the province that major tourist attractions in Sukhothai, such as the historical park, remain operational. The Loy Krathong festival is scheduled to take place as planned, with some tourists already making reservations.
