Thai investment to rise 20 percent on economic optimism
Thailand’s private sector and state enterprises are planning to invest nearly $29 billion this year in new projects, an increase of 20 percent over last year, as most major Thai corporations expressed confidence that the economic recovery will continue to gather strength and accelerate despite global uncertainties.
Investment, along with exports and consumption, is a key pillar of the Thai economy. As exports struggled in recent years because of weak economies in some of Thailand’s key markets, investors, instead of filling the void, also became cautious, holding back on new projects until better economic times. With most international analysts confident that Thailand will have solid growth levels going forward, investors are now beginning to make new commitments.
With the economy on a surer footing, leading private sector firms such as Siam Cement and Central Group have announced new capital expenditures this year, and partially privatized state energy giant PTT will make the largest investments among the public sector companies. The forecasts do not include government investments in infrastructure, which will be considerable in the light of the drive for new rail lines, roads and upgrades to airports and seaports.
Board of Investment (BoI) Secretary-General Hirunya Suchinai said the value of applications for BoI privileges rose to $16.9 billion last year, exceeding the target of $15.9 and lending optimism that this year the figure will surpass $17.4 billion.
The Ministry of Commerce, meanwhile, approved 28 investment projects from foreign firms during the month of March, mainly from Singapore, Japan, South Korea and China. Since January, the ministry has approved investments from 69 foreign companies.
Siam Cement Group (SCG), the leading construction materials company in the region, is devoting just over $2 billion this year for both its domestic and overseas businesses, especially in countries in the 10-member Association of Southeast Asian Nations, where many economies are growing rapidly.
“Our investment this year is higher than last year, which was only $870 million, because our planned investment in the Vietnamese petrochemical industry was delayed until this year,” SCG president and CEO Roongrote Rangsiyopash said.
Central Group, a conglomerate involved in real estate and retail, also plans to invest $1.3 billion this year on expanding its development and real estate portfolios. The group will break ground on six shopping malls, five department stores, four hotels and three condominiums.
On the state side, PTT has the biggest investment budget of $2.4 billion for both domestic and overseas projects – with about $1.8 billion planned for investments in Thailand. This is part of PTT’s five-year (2017-21) investment plan worth a total of $9.8 billion.
The plan focuses on expanding PTT’s infrastructure and oil businesses, including natural-gas pipelines, service stations and facilities for imported liquefied natural gas.
Photo courtesy of thinkasiainvestthailand.com