Economic growth next year could reach 5-6% if manufacturing can make a full recovery in the next three to six months while the government accelerates rehabilitation of infrastructure and facilities for logistics.

The National Economic and Social Development Board bases its highly optimistic view on the assumption that the government can speed up draining water from badly flooded industrial estates while also rebuilding roads and other facilities.

Companies also would have to speed up their own factory rehabilitation. Some have already ordered machinery to be installed after the water recedes.

Arkhom Termpittayapaisith, the NESDB secretary-general, said getting factories operating again was the priority in the short term because Ayutthaya is a significant base for high-tech industry. The suspension of production there has had a serious impact on IT and automobile companies worldwide.

The cabinet last week established three committees on economic, infrastructure and social impact to handle rehabilitation plans, which will be proposed at today's cabinet meeting.

Measures are expected to cover tax exemptions and services to facilitate the import of new machinery.

The NESDB last week forecast that the flooding would reduce GDP by 1% to 1.7% but the projection did not include damage to Nava Nakorn and other industrial estates.

Industry Minister Wannarat Channukul said the ministry planned to ask the cabinet to allow investors in Ayutthaya, classified in BOI zone two, to enjoy maximum Board of Investment privileges.

Investors in BOI zone two are exempt from corporate tax for five years but in zone three the exemption lasts for eight years.

Atchaka Sibunruang, the secretary-general of the BOI, said the agency was considering Finance Ministry proposals for tax breaks. It will seek cabinet approval to waive corporate income tax for eight years for investors affected by the flooding.

She said investors were worried on how to restart operation as soon as possible in order to retain their customers, so the government needs to help them to rehabilitate their sites.

The BOI estimated the electronics industry alone would lose up to 400 billion baht in revenue from production suspensions of 3-6 months.Ms Atchaka said a clear long-term flood prevention plan with a precise schedule for implementation was now essential.

"A plan to protect against disaster in the long term is very important for newcomers because investors may be reluctant to invest in Thailand," she said.