Survey shows more Thai businesses bullish on economy

economy2An increasing percentage of Thai business executives are optimistic that the Thai economy will continue to grow in 2017 because of infrastructure investment, tourism, political stability and rising commodity prices, according to a survey of more than 1,000 businesses in 45 industries released last week.

The survey results represent positive news for the government’s economic team. Deputy Prime Minister Somkid Jatusripitak, who oversees the economic ministries, called on businesses to be bolder and invest more.

Investment is one of the three key pillars of the Thai economy, along with exports and consumption. Exports have been struggling because of weak economies in many overseas markets, but the figures have turned more positive in recent months.

The Thai economy grew an estimated 3.2 percent in 2016, according to the Asian Development Bank (ADB), a major improvement over the 0.8 percent of 2014, and the 2.8 percent in 2015. The ADB is forecasting 3.5 percent growth in 2017.

The Federation of Thai Industries and the National Institute of Development Administration conducted the survey and also included 10 industrial institutes among the respondents. Its results showed that about 35 percent of respondents were confident that the economy will continue to accelerate in 2017, compared to just 25 percent in a previous survey a few months ago.

They cited several positive factors, mostly domestic, for their optimism, including government investment in infrastructure, government policies to promote tourism and investment, and government police to promote investment in special economic zones, in particular the Eastern Economic Corridor.

The corridor is a massive development program on the Eastern Seaboard near Bangkok to create specialized industrial estates that cluster industries, along with model green living centers, and advanced infrastructure to improve logistics and transportation links with the region and beyond.

Many also named Thailand 4.0, the national policy to create a more advanced economy and society over the next 20 years, as a reason for viewing the future in a positive light.

However, 16 percent of respondents said they feared an economic contraction. Their reasons were mostly focused on external factors such as a slowdown in China, Brexit, new protectionist trade policies, and volatile capital markets.