Investment applications double in first two months of 2016
Both the number and value of investment applications doubled during the first two months of 2016 compared to the same period last year, the Board of Investment said last week, as it also announced it had developed a new investment-promotion package designed to foster creative talent and that will allow individuals to receive investment incentives for the first time.
Hiranya Sujinai, secretary-general of the Board of Investment (BoI) said that during the first two months of this year, 187 projects valued at $918 million were the subject of applications for investment promotion. That is almost double the $467 million approved during the same period in 2015.
The increase is a promising indicator because investment is an important pillar of the Thai economy, along with exports and consumption. All three pillars, however, have been performing below expectations during the past three years, a ripple effect of the weak global economy and the economic slowdown in China.
The Bank of Thailand recently cut its forecast for growth slightly this year because of unfavorable external factors. The World Bank recently reported that the economies of Thailand, Malaysia and Singapore could expect only modest growth in the near term because of their dependence on exports in a weak global environment, while economies in the region that rely more on consumption, such as the Philippines, would probably register stronger growth.
Increasing investment, however, is a positive sign that Thailand’s economic fundamentals are still solid and that growth will eventually rebound to stronger levels. Of the 187 projects approved by the BoI, 120 were foreign direct investment totaling $353 million, five times greater than during the same period last year. Roughly 68 percent of the projects were in the government’s 10 targeted industries, especially digital, agricultural products, and petrochemical and chemical products, Hiranya added.
Meanwhile, Deputy Commerce Minister Suvit Maesincee told reporters last week that the BoI has prepared an investment incentives regime to support the development of the creative economy. Under the regime, individuals will also be eligible for incentives if they are involved in investment projects that foster the creative economy.
Thailand’s creative economy has been estimated at 13.8 percent of its gross domestic product with a value of $45 billion. Sectors that contribute to the creative economy and have been strong performers include fashion, design and broadcasting. Suvit said it would not be difficult for Thailand to increase the size of its creative economy to account for at least 20 percent of GDP within the next three to five years.