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Push for Investments Expected to Enable GDP Growth of 5% in 2016

By on Nov 19, 2015 in Investment-Land, Property News

news-bkkbiz_19novThailand’s total investments are expected to grow by 8-9 per cent next year, compared to 2-3 per cent on average during the past several years, because of government initiatives, especially in the high-technology sector, resulting in an economic expansion of 5 per cent next year.

Speaking at the seminar yesterday on “Thailand Economic Outlook 2016”, co-hosted by Krungthep Turakij newspaper, Now26 channel and partners, Industry Minister Atchaka Sibunruang said that investment grew by 9 per cent annually on average between 1994 to 2003, which helped drive GDP growth by more than 5 per cent.

She added that after a slowdown in investment expansion, the country’s gross domestic production (GDP) grew only 3.4 per cent a year. Slowdown in investment meant lower income for labourers and the public sector, which led to Thailand being trapped as a middle-income country for too long.

“Strong investment promotion by the government and cooperation of private enterprises should drive investments both from foreigners and domestic to grow by 8-9 per cent in 2016,” said Atchaka.

She said the government would accelerate investment stimulation, especially in the high-technology sector and in the super-cluster sector to ensure stronger growth of Thai industries in the long run.

wmgallery-gallery-JPG_C5To promote more investment, Atchaka explained that the government would adapt its investment promotion plan from standard to tailor-made privileges by providing flexible bargaining and negotiations for investors interested in investing in Thailand in desired industries. They could be offered additional tax privileges or cash reimbursement.

The government will also focus on promoting investments in 10 desired industries, consisting of: next-generation cars, smart electronics, affluent, medical, and wellness tourism, agriculture and biotechnology, food, robotics for industry, logistics and aviation, biofuels and biochemical, digital, and medical.

“The government will encourage the industries to adopt more automation, Internet and smart machines to help increase value-added products made in Thailand,” she said.

Thai investors, especially small and medium enterprises, have been urged to form joint ventures with foreign investors from Japan, China, Taiwan, Korea, and investors from Western countries, which have high technology and innovation.

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To draw more investment from abroad, the government will also continue to set up trade and investment promotion missions in targeted nations such as Japan, South Korea, Germany and the United States in the next few months, she added.

A panelist, TMB chief executive officer Boontuck Wungcharoen, said Thailand’s economic growth in 2016 is expected to be better than this year amid positive signs of recovery in exports and consumption. The policy interest rate could increase by another 50 basis point by the middle of next year. However, the baht would weaken to about Bt36 to the US dollar.

“One of the key economic driving engines next year will be the government’s investment, which will help promote more public investment and increase employment. The infrastructure investment plan and logistics development in cross-border provinces for dual-track and motorways, and the special economic zones will also help project Thailand as a connectivity centre for the Asean region,” he said.

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Thongma Vijitpongpun, chairman of the executive committee and CEO of Pruksa Real Estate, said the government’s investment, especially on infrastructure development, would help drive the real estate and property development sector to grow by 5-10 per cent next year. The real estate sector will grow largely in rural areas following the SEZs and logistics development investment.

Jit Siratranont, deputy secretary-general of the Board of Trade of Thailand, said since investment is one of the key economic driving engines, Thailand needs to increase its competitiveness to facilitate more investment. Jit suggested reducing duplicate laws and regulations, reducing some processes in setting up or expanding businesses, as well as supporting SMEs in accessing funds.

Sriwan Eamrungroj, executive vice president, Marketing, Commercial, Supply of PTT Global Chemical Plc, said the continued drop in the oil price will help stimulate the domestic economy, as people will have more spending power.

Source: The Nation – 19 November 2015

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