Investments in new factories rises by 14 percent
Domestic and foreign manufacturers gave Thailand’s economy a strong vote of confidence during the first 11 months of this year as the value of investments in new factories rose 14 percent year on year during that period according to statistics released last week by the Ministry of Industry, painting a bright picture for the Kingdom’s economic resurgence going forward into 2018.
Private investment had been relatively weak in Thailand in recent years because of the global recession that dampened exports, and because of the Kingdom’s political turbulence during the last decade. Thailand’s politics have been restored to a calmer state and the rise in investment is a signal that corporations, both local and multinational, are once again confident in the Kingdom’s economic and overall prospects.
Gross domestic product, which had been stagnant three years ago, is now accelerating and several analysts have forecast that it will approach 4 percent this year on a stronger-than-expected recovery in exports.
During the first 11 months of this year, a total of 4,170 factories received licenses to build or expand, according to Mongkol Preukwatana, director general of the Industry Ministry’s Department of Industrial Works (DIW).The total value of the investments was over $14.5 billion. The sectors that attracted the most funds for new projects were food processing and steel, while the leading sectors that expanded their plants included plastics and consumer products.
Although farmers have been called the backbone of the Thai economy, manufacturing is its beating heart, accounting for the largest contribution to the Kingdom’s gross domestic product. Manufacturing transformed Thailand from a poor rural backwater to an industrialized middle-income nation at the early stages of becoming an advanced economy.
The government is promoting a three-province advanced development zone called the Eastern Economic Corridor (EEC) as a showcase for the advanced economy and society it is aiming to create. Mongkol said that 529 of the new factories are located in the Corridor. Among the EEC provinces, 117 of the new factories are in Chachoengsao, 271 in Chonburi and 141 in Rayong. The EEC is just east of the capital Bangkok.
Mongkol said the DIW had been working to increase the ease of doing business for factory owners and investors. The average time it takes to get licenses has been cut in half from 30 days to 15 days. The department has set up a one-stop center where investors can register and apply for licenses either in person, or online.