The recent flooding in Thailand has only strengthened the country’s determination to help SME manufacturers triumph in the face of an unprecedented natural disaster. The government is currently in the process of allocating billions of Baht for long term reclamation projects which will be of immediate and long-term assistance in seeing that the situation is corrected as soon as possible …and does not repeat in the future.

There is no denying that the effect of the floods on Thailand’s economy has been profound. Small traders and multinationals alike have fallen victim to the disaster. But now Thailand’s ‘Road to Recovery’ has begun and the process of getting back to normal is underway.

Thailand has for decades been the primary manufacturing hub in South East Asia, exporting to industries around the world and the flooding badly disrupted global supply chains.  About 45% of the world’s computer hard-drives are produced in Thailand by manufacturers like Toshiba, Seagate and Western Digital, all of whom had to shut down operations.

But K-Research projects that Thailand’s economy in 2012 will gradually recover in the first quarter of the year and see economic expansion in 2012. Key drivers will include public and private investments being spent on post-flood recovery, as well as infrastructure development to prevent future flooding and improve water management. K-Research estimates investments related to floodwater management and rehabilitation could reach THB 400-550 billion in 2012. Moreover, stimulus packages from the government and the implementation of the 2012 fiscal budget may help boost consumption. Thailand’s economy will expand at 4.3% in 2012 and be in a range of 3.5-4.8%.