# Thailand’s Business Investment Outlook Shows Promising Signs

- Link: https://www.thailand-business-news.com/business/190704-thailands-business-investment-outlook-shows-promising-signs
- Published: 2025-01-28T08:45:07+07:00
- Author: Zaw Win Maung

**Investment shows positive signs from BOI promotion applications but still faces
challenges. Meanwhile, consumer confidence has improved but its momentum should 
be monitored after the end of stimulus measures.**

**Applications for BOI investment incentives reached a 10-year high of over THB 
1.1 trn in 2024, while other indicators suggest more challenges ahead.** The Board
of Investment (BOI) reported that the number of applications for investment promotion
reached a record high of 3,137 projects (+40% YoY) in 2024 and  its investment value
rose to the highest level since 2015 at THB 1,138.5 bn (+35%). Investment values
in the target industries were led by Digital (THB 243.3 bn), Electronics & electrical
appliances (THB 231.7 bn), Automotive & parts (THB 102.4 bn), Agriculture & food
processing (THB 87.6 bn), and Petrochemicals & chemicals (THB 49.1 bn). Foreign 
Direct Investment (FDI) accounted for 2,050 projects (+51% YoY) with total investments
worth THB 832.1 bn (+25%), led by investors from Singapore, China, Hong Kong, Taiwan,
and Japan.

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The outlook of business investment shows more positive signs, as reflected by the
growth in both the number and investment value of BOI promotion applications. Additionally,
the issuance of investment promotion certificates, which is a step close to actual
investment, recorded 2,678 projects (+47% YoY) with total investments worth THB 
846.5 bn (+72%).

In addition, there are government’s policies supporting investment, including

(i) the Cabinet’s approval of the draft Entertainment Complex Business Act on January
13, and the criteria adjustment for the Long-Term Resident Visa to attract high-
potential foreign professionals to Thailand.

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(ii) measures to alleviate the impact of the Global Minimum Tax, such as the BOI’s
plan to allow promoted companies to reduce corporate income tax by 50% of the normal
rate for up to 10 years, as well as measures to enhance competitiveness.

However, several challenges continue to pressure the investment climate, such as(
i) the Business Sentiment Index (BSI) in December remaining below 50 (indicating
contraction zone) for the 15th consecutive month and a 1.7% contraction in the Manufacturing
Production Index over the first 11 months of 2024, (ii) structural problem such 
as declining competitiveness, and (iii) the rising trade tensions between the US
and China.

**Consumer confidence gradually recovers on the back of short-term stimulus measures,
but growth of household income remains sluggish. **The Consumer Confidence Index(
CCI) in December increased for the third consecutive month, reaching a six-month
high of 57.9, up from 56.9 in November. This improvement was supported by a further
recovery in the tourism sector during the high season and  government’s stimulus
measures, which boosted spending among low-income groups. Meanwhile, spending among
middle-income groups slowed, as reflected in a contraction in durable goods purchases.

Although the CCI has improved, the sustainability of its recovery remains uncertain,
as the current index level is still relatively low compared to the pre-COVID average(
75.5 in 2019). The positive momentum has largely been driven by short-term stimulus
measures.

Early this year, additional measures included the Easy E-Receipt program and a THB
10,000 cash handout for eligible senior citizens are expected to provide temporary
support. However, consumption continues to face structural challenges, particularly
due to high household debt, despite a gradual decline in debt burden following the
debt relief program for vulnerable groups. According to the National Statistical
Office’s latest data (2021–2023), compiled by Krungsri Research, average liquid 
assets per household increased by just THB 8,238 per year, primarily due to an increase
in deposits and other financial assets rather than a rise in net income. 

Moreover, income growth has been slow and close to spending growth, reflecting weak
household consumption. In particular, households with earnings of less than THB 
30,000 per month (accounting for 67% share of total households) have been struggling
with their spending growth outpacing their income growth or their expense-to-income
ratio exceeding 100%.