EEC exceeding investment target, GDP forecast raised
Investors have been giving a big thumbs-up to Thailand’s showcase development zone. Deputy Prime Minister Somkid Jatusripitak said last week that investment in the Eastern Economic Corridor (EEC) reached a better-than-expected $9.5 billion in 2017, which contributed to the Fiscal Policy Office at the Ministry of Finance raising its economic growth forecast for this year to 4.2 percent.
The investment figure for the EEC was 50 percent higher than the $6.4 billion that had been anticipated. The three-province Corridor east of Bangkok is home to 10 industries prioritized by the government under Thailand 4.0, the 20-year national strategy to create a higher-technology economy driven by innovation and research and development.
Prime Minister Prayut Chan-o-cha said last week that his government plans to invest $31 billion in infrastructure for the EEC. Roughly 30 percent of that investment will be made directly by the government, while 59 percent will come from public-private partnerships, 10 percent from state enterprises and 1 percent from the Royal Thai Army.
The first focus of the investment will be technology and human resource development, the prime minister said.
Kanit Sangsubhan, secretary-general of EEC Office, added that, “the government strongly believes that the EEC scheme will attract both local and foreign investors to invest in the EEC, which is designated to become the new main investment project in ASEAN (the Association of Southeast Asian Nations).”
Development of the EEC will proceed in three phases, he said. The first phase between 2017-2018, will court both domestic and foreign investment in the EEC; the second phase between 2019-2021, will concentrate on transport development; and the third phase, from 2022 onwards, will create sustainable development and bolster the infrastructure network to link neighboring countries.
Public investment in infrastructure and the EEC are expected to drive economic growth in 2018, according to the Fiscal Policy Office (FPO) at the Ministry of Finance. The Office raised its growth projection for this year to 4.2 percent. Last year’s growth was 3.9 percent.
The FPO forecast that public investment will rise by 11.8 percent this year, adding that its forecast was a conservative one and that the ultimate figure may well be higher.
In addition, exports, which are the traditional driver of the Thai economy, were forecast to increase 6.6 percent in 2018, up from an earlier projection of 5.7 percent made three months ago. That forecast may also be conservative, as exports exceeded forecasts last year, growing 9.9 percent in 2017. Exports account for about 70 percent of gross domestic product.