Floods could reduce Thailand's economic growth by 1 percentage point: World Bank

People row a boat in the floodwaters in Bang Ramintra district in Bangkok, Thailand, Nov. 22, 2011. The situation has improved dramatically in recent days and cleanup has begun in many areas.

The devastating floods in Thailand could reduce the country's 2011 economic growth by around 1 percentage point, the World Bank said in a report released on Tuesday.

The Thai economy is projected to grow by 2.4 percent this year, the bank said in its latest East Asia and Pacific Economic Update.

This represents a downward revision from the bank's previous forecast of 3.7 percent released six months ago, mainly due to the impact of the floods and the weakening external demand from the developed markets.

"The impact of the floods will be most severely felt in the last quarter of 2011, coming mainly from production losses of the industrial estates in the vicinity of Bangkok," said the report.

The World Bank said the estimates of the losses from the floods in southeast Asian countries were not yet complete.

Thailand experienced rarely-seen floods over the past weeks, forcing the closing-down of many factories and quite a part of the capital Bangkok.

The World Bank also revised the growth forecast for Thailand in 2012 by 0.2 percentage point to 4 percent. Factors supporting growth include the reconstruction and rehabilitation by both the public and private sectors after the floods,

dissipation of supply chain disruptions, a momentum in household consumption and likely solid performance of private investment following the improved political stability.

The bank revised its growth forecast for developing East Asia excluding China downward from 5.3 percent to 4.7 percent. China is expected to grow by 9.1 percent this year and 8.4 percent next year, respectively.