Pridiyathorn expects 2-3 years of sufferings

In his speech at "Rainbo Fair" in Chiang Mai, he said that the 1997 crisis abruptly emerged and was cured in a fast manner as then US, European and Japanese markets - of which contributions accounted for 42 per cent of the world's gross domestic product - were strong.

 However, the current crisis has intensified over time, sparked by the housing crisis in mid-2007 which led to a fall in housing prices, defaults in debt instruments and financial losses to financial institutions. He noted that in September, if any more US banks collapse, it would make it harder for the global economy to recover.

 "Exports in the first quarter could shrink 25 per cent on year and worsen in the second quarter. They could head up in the fourth quarter. Tourism is also affected, with contraction from the third quarter in 2008 due to global economy. It was also hard hit in the fourth quarter of 2008 due to the Bangkok airports closure," he said.

 Pridiyathorn commented that the world economy prospered due to consumerism. This boosted Thailand's capacity utilisation to 76 per cent, but it fell to 62 per cent in December and could fall below 60 per cent.

 "It should take at least 2-3 years to recover. This means more workers would lose jobs in the period. The government is in dire need of measures to handle unemployment," he said.

 Thailand's exports dropped 26.5 per cent in January.

 Prime Minister Abhisit Vejjajiva said that the sharp drop in January exports is not beyond expectation, following the negative figures witnessed by some countries.

 He said before boarding the plane to Indonesia that now there is hope that the economic stimulus measures would sustain the economy in the second quarter.  He added that the government has closely monitored the situation.