Consumer confidence fell to the lowest levels since the September 2001 attacks on the United States as the flooding in Thailand caused worldwide shortages on food and electronics parts, sending prices on products soaring in its wake.
Floodwaters ruined more than a quarter of the nation’s rice crop since waters began to rise in north of the country in July, according to reports.
“The scale of the floods is unprecedented, and therefore, the threat on regional food security is also unprecedented,” said Yang Razali Kassim, a senior fellow and analyst at the S. Rajaratnam School of International Studies of Nanyang Technological University in Singapore, to Voice of America.
“Rice supplies to the region is bound to be affected, adding to the pressure on food prices already saw rises in recent times due to shortages caused by erratic weather,” Kassim said.
More than 1,000 factories closed and sent shock waves rippling throughout business communities worldwide in the wake of the rising waters.
It is something that has hit nearly every industry across the globe. Honda, Toyota and other carmakers experienced parts shortages, leading to a reduction in labor force it factories in the U.S., Canada and the United Kingdom.
Apple and other computer manufacturers cited problems manufacturing new machines, because hard drive factories shut their doors to keep out the floodwaters in Bangkok.
The prices of hard drives increased between 20 to 40 percent, according to a Reuters report.
Sony, Nikon and Canon experienced shipping delays and shortages associated with their digital cameras manufactured in Thailand.
Sony announced it expects profits for the year to drop by 90 percent because of the flood, the Financial Post reported.
“The impact on global growth could be more significant than what is currently expected,” said Jimmy Jean, economic strategist with Desjardins Capital Markets, to the Financial Post.
"The flooding has dragged down consumer confidence and it will probably fall further if the economy is severely affected and the government can't speed up rebuilding within 3-6 months," said Economist Thanavath Phonvichaisaid to Reuters.
The consumer confidence index from the University of the Thai Chamber of Commerce fell from 72.2 in September to 62.8 in October as the Thai government announced recovery efforts could near $4 billion.
The latest reports surfacing from the flood-stricken nation indicate that expanding floodwaters also hit factories run by Nestle, YumYum and President Bakery, which makes buns for McDonald’s and Farmhouse Bread.
“This is still an unfolding situation, but the impact on global trade and inflation may be greater than expected,” Jean added.