Investment in Thailand to top $25 billion

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Investment into Thailand is rising, but export figures had to be revised this month

Investors’ applications through the Thai Board of Investment (BoI), the approving body for strategic industry and commercial investments under a tax privileges scheme, will reach 800 billion baht, or more than $25 billion this year, the country’s industry minister Pongsvas Svasti said according to local media reports.

This will exceed the projected 630 billion baht for this year by far.

According to BoI statistics, the application value for the first half of the year has already reached almost 500 billion baht and stood at 570 billion baht by the end of July. BoI Secretary General Atchaka Sribunruang said the prospective 800 billion baht in investment applications this year would be the highest figure since the BoI was established.

The most attractive industries investors – domestic and foreign – were applying for were services and public utilities, followed by automotive, machinery and metals and electrical and electronics. Petrochemical, paper and plastic industries are the top sectors by value.

Investment applications are also being driven by government infrastructure spending, e.g. into large seaports and railway expansion.

Regarding foreign direct investment, the BoI announced a significant increase of 66.5 per cent in value during the first six months of 2012 as compared to the same period last year. A total of 700 projects applied for investment promotion at a total value of 280 billion baht from January to June.

The BoI has also recently approved Thailand’s new overseas investment strategy which will focus on Indonesia, Myanmar and Vietnam. Under the strategy, these three countries are the first priority, but other ASEAN member states, India and China have also been included as target market for Thai overseas investment. The BoI has also opened a new office in Mumbai in mid-August to attract Indian investment.

Export figures revised

On another note, Thailand this week had to revise its projected export growth for 2012 to 7.3 per cent from originally 15.1 per cent. The reasons cited were, apart from a sluggish world market, a weakened euro zone and dropping demand in China, that one-third of the Thai industries and factories hit by 2011’s floods have yet to resume operations, according to the National Economic and Social Development Board of Thailand.

The country’s Deputy Prime Minister and Finance Minister Kittiratt Na-Ranong has come under fire because he originally insisted on the export growth projection of 15 per cent, but later had to cut it down, saying he was telling a “white lie” to encourage industry players. Companies executives complained that the government should be more reliable in its statements to allow planning on the basis of proper figures.

However, Kittiratt later said that he still expects a 9 per cent export growth this year.

The Thailand government also maintained its economic GDP growth target of 7 per cent for 2012, and the Thai Central Bank at 6 per cent, which is both higher than the World Bank forecast for the Kingdom of 4.5 per cent (as reported by Investvine).

 

 

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Reading Time: 2 minutes

Investment into Thailand is rising, but export figures had to be revised this month

Investors’ applications through the Thai Board of Investment (BoI), the approving body for strategic industry and commercial investments under a tax privileges scheme, will reach 800 billion baht, or more than $25 billion this year, the country’s industry minister Pongsvas Svasti said according to local media reports.

Reading Time: 2 minutes

Investment into Thailand is rising, but export figures had to be revised this month

Investors’ applications through the Thai Board of Investment (BoI), the approving body for strategic industry and commercial investments under a tax privileges scheme, will reach 800 billion baht, or more than $25 billion this year, the country’s industry minister Pongsvas Svasti said according to local media reports.

This will exceed the projected 630 billion baht for this year by far.

According to BoI statistics, the application value for the first half of the year has already reached almost 500 billion baht and stood at 570 billion baht by the end of July. BoI Secretary General Atchaka Sribunruang said the prospective 800 billion baht in investment applications this year would be the highest figure since the BoI was established.

The most attractive industries investors – domestic and foreign – were applying for were services and public utilities, followed by automotive, machinery and metals and electrical and electronics. Petrochemical, paper and plastic industries are the top sectors by value.

Investment applications are also being driven by government infrastructure spending, e.g. into large seaports and railway expansion.

Regarding foreign direct investment, the BoI announced a significant increase of 66.5 per cent in value during the first six months of 2012 as compared to the same period last year. A total of 700 projects applied for investment promotion at a total value of 280 billion baht from January to June.

The BoI has also recently approved Thailand’s new overseas investment strategy which will focus on Indonesia, Myanmar and Vietnam. Under the strategy, these three countries are the first priority, but other ASEAN member states, India and China have also been included as target market for Thai overseas investment. The BoI has also opened a new office in Mumbai in mid-August to attract Indian investment.

Export figures revised

On another note, Thailand this week had to revise its projected export growth for 2012 to 7.3 per cent from originally 15.1 per cent. The reasons cited were, apart from a sluggish world market, a weakened euro zone and dropping demand in China, that one-third of the Thai industries and factories hit by 2011’s floods have yet to resume operations, according to the National Economic and Social Development Board of Thailand.

The country’s Deputy Prime Minister and Finance Minister Kittiratt Na-Ranong has come under fire because he originally insisted on the export growth projection of 15 per cent, but later had to cut it down, saying he was telling a “white lie” to encourage industry players. Companies executives complained that the government should be more reliable in its statements to allow planning on the basis of proper figures.

However, Kittiratt later said that he still expects a 9 per cent export growth this year.

The Thailand government also maintained its economic GDP growth target of 7 per cent for 2012, and the Thai Central Bank at 6 per cent, which is both higher than the World Bank forecast for the Kingdom of 4.5 per cent (as reported by Investvine).

 

 

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