Thailand received the lowest foreign direct investment (FDI) of US$2.96 billion among ASEAN members in 2023, according to the National Economic and Social Development Council (NESDC).
The council urged the government to facilitate the country’s transition to high-tech industries in order to attract more investors.
Key takeaways
- The country has reported US$2.96 billion in foreign investment, one of the lowest marks among the ASEAN members.
- Thailand’s GDP grew by 1.5% in the first quarter of 2024, the lowest among ASEAN members, driven by increased private consumption and the service sector.
- The NESDC has revised Thailand’s annual GDP growth projection to 2-3% due to risks from the US-China trade war and geopolitical conflicts.
Thailand has positioned itself as one of the ASEAN members with the lowest revenue in terms of foreign investment in the SEA region.
Indonesia emerged as the leader in Foreign Direct Investment (FDI) in Southeast Asia, attracting a total of $21.7 billion in FDI. This significant influx of foreign investment reflects the country’s growing appeal to international investors and its potential for economic growth.
Following Indonesia, Malaysia secured the second position with a total FDI of $18.5 billion. Malaysia’s ability to attract substantial foreign investment highlights its strong economic fundamentals and business-friendly environment.
Vietnam also performed well in attracting FDI, securing a total of $8.25 billion. Vietnam’s consistent efforts to improve its investment climate and attract foreign capital have contributed to its position as an attractive destination for international investors.
Recently, Thailand Business News reported that Thailand reached an annual GDP growth of 1.5% for the first quarter of the year. The country’s growth was driven by exports, private sector consumption, and more exports.
Specialists from the NESDC stated:
“The industries that have been driving the Thai economy in the past have started to play a diminishing role in Thailand’s manufacturing and export sectors,” “The declining FDI also affected Thailand’s exports, which contracted 1% in the first quarter of 2024, and the Manufacturing Production Index also went down by 3.7%, contracting for six consecutive quarters.”
Officials from the NESDC advised the government to promote incentives for the manufacturing industry by encouraging the creation of new technological products that allow the country to compete in the technological markets of the SEA region.
Technology as a key factor for Thailand’s economic growth
Technology is becoming a key factor behind the economic growth of Thailand, with different initiatives like the Digital Wallet Project.
This project aims to modernize the financial landscape of Thailand, making transactions more efficient and accessible. It is projected with the inclusion of the Digital Wallet project.
Tourism, traditionally a major economic driver for Thailand, is also transforming technology. The sector is leveraging digital platforms to enhance visitor experiences and streamline operations, which is essential as the country competes for a share of the global tourism market in a post-pandemic world.
The export sector, particularly electronics, is another area where technology is making a mark. Thailand has the highest export share of electronic appliances.
Moreover, technology is playing a crucial role in addressing the household debt problem by providing innovative financial solutions and services that can improve financial literacy and management among the populace.
Private consumption and tourism are expected to remain the main engines for GDP growth, and private investment, particularly in the electric vehicle sector, is anticipated to support this growth further.
