Thailand Remains Attractive Among Foreign Investors

(03/07/2012)

The number of foreign investment projects in the first five months of 2012 indicates that Thailand remains an attractive investment destination among foreign investors. The Secretary-General of the Office of the Board of Investment (BOI), Mrs. Atchaka Sibunruang, said that, from January to May this year, Thailand’s foreign direct investment amounted to 205.6 billion baht, an increase of 45 percent, when compared with 141 billion baht in the same period of 2011. The number of investment project applications also increased by 26 percent to 547 projects, against 432 projects in 2011. Of the total investment applications, 57.4 percent were submitted by existing investors who wished to expand their investments in Thailand, accounting for 314 projects with a total investment value of 152 billion baht. There were 233 new projects seeking promotional incentives, with an investment value of 53.56 billion baht. . The industries with the highest investment value included metal products, machinery, and transport equipment, with 176 projects valued at 62.5 billion baht; electronic and electrical appliances with 116 projects valued at 55.7 billion baht; service and public utilities with 106 projects valued at 24 billion baht; and chemicals, paper, and plastics with 73 projects valued at 24 billion baht. According to BOI, during the five-month period, Japan remained the largest group of foreign investors, with the highest number of applications, at 308 projects, worth 130.5 billion baht, followed by the Netherlands, Malaysia, Singapore, and the United States. Meanwhile, the Bank of Thailand stated that private investment in Thailand in May 2012 remained robust, as reflected by a surge in the private investment index of 14 percent. Notably, steady growth in machinery and equipment investment was largely attributed to rising investment in commercial cars and imports of capital goods in several industries, including electronics, automobiles, and machinery and equipment. In addition, construction investment expanded from investment in residential construction across all regions except Bangkok, as real estate developers turned to expand toward provincial markets. In its release, the Bank of Thailand also stated that the overall economic stability in the country remained sound as unemployment remained at a low level while headline inflation rose slightly. Continued improvement in manufacturing production fueled a sustained expansion in both private consumption and investment. Exports registered favorable growth despite the adverse impact from the European debt crisis. However, Thai exports to Spain, Italy, and France continued to decline in contrast to most markets. The decline reflects the impact of the eurozone crisis. As for the tourism sector, the number of foreign tourist arrivals in Thailand in May recorded at 1.5 million people, rising by 9.4 percent. This was mainly due to a rising number of foreign tourists across almost all regions, particularly China, Russia, and India.