* PM, city officials say Bangkok will not flood
* Damage to date around the country $3.2 billion
* Industry in the centre has suffered; GDP forecast cut
By Panarat Thepgumpanat
BANGKOK, Oct 14 (Reuters) - Thai Prime Minister Yingluck Shinawatra tried to reassure residents of Bangkok on Friday that the capital should largely escape the flooding that has covered a third of the country since July and caused damage of at least $3 billion.
The north, northeast and centre of Thailand have been worst hit and Bangkok -- much of it only two metres (6.5 ft) above sea level -- is threatened at the weekend as water overflows from reservoirs in the north, swelling the Chao Phraya river.
"Bangkok may face some problems in areas that are on the outer sides of the irrigation dikes but water levels will not be too high. But inner Bangkok has extremely high defences," Yingluck told reporters.
"In conclusion, Bangkok should still be considered safe," she said.
At least 289 people have been killed around the country by heavy monsoon rain, floods and mudslides since late July.
"We didn't think the flooding would be this severe," Bank of Thailand Governor Prasarn Trairatvorakul told reporters.
"This time the industrial sector has also been affected and the damage is probably about 100 billion baht," he added.
Kittirat Na Ranong, deputy prime minister in charge of the economy, came up with the same provisional estimate on Thursday, equivalent to $3.2 billion and more than 1 percent of gross domestic product.
The Finance Ministry has cut its growth forecast for this year to 3.7 percent from 4.0 percent.
Run-off water from the north will arrive in the Bangkok area at the weekend at the same time as high estuary tides hamper the river's flow into the sea. This may also coincide with storms and heavy rain.
"During October 15 to 18, it may be a dangerous time because water from the north will be coming in ... But I confirm it has not reached a crisis stage as of this moment," Bangkok Governor Sukhumbhand Paribatra told reporters.
Chalit Damrongsak, director general of the Royal Irrigation Department, said the flows from the north into the Chao Phraya river were lower than expected.
"The water levels that are going to enter Bangkok on October 15-16 will most likely be only at 2.3-2.4 metres. Therefore, it will not surpass Bangkok's irrigation dike levels of 2.5 metres," he said. "I can confirm that Bangkok is going to be spared from the flood."
Despite such assurances, Bangkok residents have stocked up on bottled water and foodstuffs such as instant noodles.
Late on Thursday, residents in an area covering a northern Bangkok suburb received a warning to evacuate from the government's crisis control centre after a sluice gate had supposedly burst, but it turned out to be a false alarm.
The central bank has advised the finance sector to take precautions and told commercial banks to make sure they have enough cash. It said 104 bank branches had closed because of flooding, mainly in the central region.
Bangkok accounts for 41 percent of the economy and contains some heavy industry, as well as extensive service, banking and tourist sectors.
In comparison, the central region, which has been badly flooded, accounts for 8 percent of GDP.
At least three big industrial estates in the central province of Ayutthaya have shut temporarily. Honda Motor Co Ltd said on Friday its plant there, accounting for 4.7 percent of its global output, would stay closed until Oct. 21.
Thailand is a major regional hub for international car firms. They tend to be located in the east, which has been little affected by the flooding, although their operations could still suffer because car parts firms have been hit.
The Federation of Thai Industries said its forecast of 1.8 million units for 2011 vehicle production looked unreachable.
"Operators have been broadly hit one way or another. Honda, for instance, no one knows how long they will have to halt their operations and how soon those parts hit by the flood will recover and they can start production again," said Surapong Paisitpattanapong, a Federation spokesman.
"Production should still be higher than last year," he said. Last year output reached 1.65 million units.