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17 Jan 2020


Drought Crisis Likely in 2020…Initial Economic Costs Estimated at about THB17-19 Billion (Current Issue No.3074)

            ​Drought has arrived earlier than the previous year in 2020 and it is expected to be prolonged because water levels at dams across the country have declined 33.1 percent YoY. Such water levels are more critical than those seen during the severe drought reported in 2015.

            Since rice, cassava and sugarcane, which are drought-tolerant crops, have been hit the hardest by the current dry season, their prices are expected to increase over the short term in 2020. However, ebbing supplies of such crops may crimp farm income by 0.5-1.0 percent YoY during the first four months of 2020. The current drought will not only affect the country's manufacturing sector, but also the export sector as it may face shortage of raw materials.

            KResearch's initial estimate of the economic costs from drought in 2020 is approximately THB17-19 billion, or 0.10-0.11 percent of GDP.  Meanwhile, close attention must be paid to the magnitude of drought during March-April and whether it will be prolonged into the cool season or not. If so, related economic costs will be substantially higher.