Board of Investment (BoI) Secretary-General Atchaka Sibunruang on Thursday voiced confidence that the investment value from applications for investment promotions would reach Bt400 billion this year as targeted given the clear recovery of the global and domestic economies.
She said the investment atmosphere was also boosted by progress in the implementation of mega-investment projects and a clear solution to investment obstructions such as the uncertainty about Map Ta Phut and its environmental management problem.
Domestic political developments have not negatively impacted the economy since the conflicts began to ease.
Private-sector confidence has improved as could be witnessed by a significant increase in the number of projects seeking investment promotions, 53 per cent to 582 in the first four months of this year from 381 in the same period last year, and investment value by 31 per cent to Bt170 billion from Bt130 billion.
Mrs Atchaka said that foreign direct investment continued an increase as well with the number of projects surging by 37 per cent to 336 and investment value by 103 per cent to Bt108 billion.
Thailand to Perform Well in 2011
The World Bank East Asia and Pacific Economic Update 2011, Securing the Present, Shaping the Future, reports that the developing countries of East Asia have rebounded from the recent global financial crisis, and that much of this recovery was due to decisive and large economic stimulus programs.
The Survey points out that in the past not all of the planned capital spending by governments materializes, and that deficit spending in 2011 is likely to decline as a more cautious approach is adopted with regard to budgets. “Thailand is an exception, where the favorable fiscal outcomes in 2010 and a possible election in the first half of 2011 have prompted the government to recently propose a supplementary budget to take advantage of higher-than- budgeted revenues.”
Thailand’s economy “closed on a strong note, supported by both domestic and external demand.” For the year, GDP was up 7.8% from 2009, although the full potential of the economy will not be realized until advanced economies perform as normal. The forecast for GDP growth is at 3.7% and 4.2% for 2011 and 2012, respectively.
In addition to the growth spurred from the respective stimulus programs adopted throughout the region, another reason for the economic growth enjoyed last year was the overall rebound in the world economy.
In this respect, East Asia benefitted from the growth of exports. In fact, the World Bank Survey shows that “East Asia’s share of global trade today is twice as large as two decades ago, and the crisis did little to halt that trend.” The Bank considers the rebound in trade to have been dramatic, given that the economic contraction was “deeper and more protracted than during the 1997–98 Asian financial crisis or the “dot.com” implosion of 2000–01.”
Thailand’s exports of goods and services outperformed in 2010, with an expected slowdown in the second half actually materializing as an expansion in merchandise exports, “helped by higher demand for agricultural products and vehicles.” During the same time, service exports also performed well, with tourist arrivals reaching an historic high in December.
Domestic private demand also picked up last year, with private consumption expanding by 5%, with private investment reported to have grown by 14%. This is following a 2% average increase over the three previous years.
“The combination of higher agricultural incomes and accommodative monetary policy helped boost demand for domestically-produced durable goods.” In particular, Thailand’s automotive sector outperformed in 2010, with production expanding by 50%, and with domestic sales up 55%.
During 2010, headline inflation remained stable at about 3%; core at 1.4%.