Director of the BoT’s Office of Macroeconomics Songtham Pinto said the 4.8% growth forecast this year would be driven largely by domestic spending. The central bank believes the recent flooding situation will not affect the country’s long-term production capacity since the production sector will soon resume normal operation in these 1-6 months.

Service in the private sector and tourism, which are expected to receive a short-term blow from the flooding, will rebound in 1-2 months due to the government’s stimulus packages. Private investment is expected to rise following long repairs of buildings and machineries damaged by the floods.

Government spending on many projects, such as the rice mortgage scheme and the minimum wage hike, will continue to be the main growth stimulus this year, according to the BoT.

In 2011, Thailand saw a mere 1.8% economic expansion after the twin disasters in Japan and severe flooding in many provinces across the Kingdom. The inundation also caused shrinkage of 48% in the production sector, especially in electronics, automobiles and electrical appliances, while exports dropped for the first time since the global credit crunch.

Despite this year’s positive outlook, the central bank has suggested a close monitoring of the situations in major economies, especially the U.S. and the Eurozone, as well as the Thai government’s clarity on future flood prevention.

NNT

BOI Secretary-General Atchaka Sriboonrueng said the number of foreign investment projects applying for the investment promotion this year rose from 692 to 828 projects.

Ms Atchaka said the value of the projects rose from Bt174 billion to Bt281 billion, a 61 per cent increase year-on-year.

“This reflects that foreign investors are still confident in Thailand,” she said. “The flood situation may slow down some foreign investment but overall the investment climate still has growth potential.”

The BOI chief added that the Ministry of Industry and the BOI will launch a campaign to restore confidence among investors early next year, as well as provide them with vital information on flood-prevention plans, especially at industrial estates.

Ms Atchaka noted that Japanese businesses remained the top investor seeking BOI investment promotions with 441 projects, increasing from 284 projects in 2010, or 55 per cent year-on-year. The total investment value also soared by 104 per cent from Bt71.3 billion in 2010 to Bt145.8 billion in 2011.

Chinese investors came second with 28 projects, valued at Bt25.9 billion, followed by 44 projects by Singaporean investors worth Bt19.8 billion and 33 projects by South Korean investors worth Bt7.1 billion.

Out of 828 projects applying, 444 represent new investment while the other 384 are expansions of already existing projects, said Ms Atchana, adding that investment in metal, machinery and transport equipment manufacturing rank are the top ranking projects, followed by electronics and electric appliances, infrastructure, chemical and

Secretary-General Atchaka Sribunrueng said the investment projects initiated by domestic and foreign companies and applying for promotions in the period increased by 47.8 per cent in volume and 7.3 per cent in value from the same period the year before.

In May alone, the number of projects applying for investment promotions totaled 107, the highest in the first five months, with a total value of Bt39.7 billion, showing that both domestic and foreign investors remained confident in Thailand’s growth potential.

Industries that sought investment promotions most include services and public utilities with 139 projects valued at Bt81 billion, production of metal, machinery, and vehicles and parts with 105 projects at Bt21.9 billion, and agricultural businesses and output with 84 projects at Bt18.3 billion.

She said the number of foreign direct investment (FDI) projects seeking promotions in the first five months reached 306 with a listed value of Bt86.28 billion, up 35 per cent in volume and 108 per cent in value from the same period last year.

Industries that are of greatest interest to investors most include metal, ceramics, and mining with a total investment value of Bt24.56 billion, metal products, machinery, and transport equipment at Bt18.94 billion, services and public utilities at Bt13.17 billion, respectively.

Foreign investors investing most in Thailand remain Japanese with 120 projects valued at Bt33.04 billion; Singapore, 32 projects at Bt 7.69 billion; Japan, 12 projects at Bt 6.47 billion; Hong Kong, 11 projects at Bt2.69 billion; Australia, nine projects at Bt2.09 billion, and Germany, 14 projects at Bt1.46 billion. (TNA)

BoI Director Duangjai Asawachintachit said there would be foreign businesspersons from over 70 countries, such as Japan, China, France, England, Australia, Italy and Vietnam, joining this year’s Subcon Thailand trade show to engage in business talks with Thai parts manufacturers. She expected to see more than 4,000 business operators pairing up for negotiations and a total trade value worth at least 4 billion THB.

The event will feature seminars on the general economic outlook, investment sentiment in Thailand, and the BoI’s role in the promotion of small and medium enterprises.

The Subcon Thailand 2010 will be organized from 13-15 May 2010 at the Bangkok International Trade & Exhibition Center (BITEC).

According to BoI Secretary-General Atchaka Sibunruang, the roadshow will be led by Industry Minister Charnchai Chairungrueng. The team will meet with the Thai Consul to Calcutta to visit a construction site of an Italian-Thai Company and will later hold talks with the Thai Ambassador, the consul to Mumbai, and representatives of Thai companies there on the promotion of investment.

They will also meet with more than 20 leading Indian companies to smooth out issues concerning investment problems in Thailand in a bid to increase their confidence.

In 2009, Indian investments in Thailand were valued at 4.7 billion THB, two times higher year-on-year, which indicates a positive direction. Software, pharmaceutical, chemicals, and automobiles are the main industries Thailand Indian investors are keen on investing. In India, Thai investors are eyeing construction, food processing, auto and electronic parts, electronics, and property development.

The BoI is currently expediting the process of establishing an office in Mumbai.

BoI Secretary-General Atchaka Sibunruang stated that the Industry Minister Chanchai Chairungruang along with the BoI would go to Mumbai, India to induce Indian investors to put in higher investment volume in Thailand. In particular, the investment would be emphasized in auto parts, agriculture, food, IT and software, textile, medical supplies, petrochemicals, and electronics. Ms Atchaka added that there would be a promotion of wedding party to persuade well-to-do Indians to come to Thailand for their wedding ceremonies. This could gain over three billion baht income for Thailand if the target was achieved.

On this occasion, Thailand would clarify the resolution of Map Ta Phut problems to investors and confirm that Thai government would support all investors in such cases.

Speaking after the meeting of the BOI board, Dr Atchaka elaborated that the meeting approved the promotion of eight investment projects worth 18.834 billion THB. The projects support auto parts and eco-car production, electricity generation, as well as exploration, production, and environmental assessment of petroleum industry.

The BOI secretary-general added that the BOI also agreed with the sustainable investment policy and it would discuss with related units to study for further measures to do so. She said this investment promotion would aim to enhance all dimensions of growth from the economy, the society, the environment, and technology in Thai industries.

Dr Atchaka however voiced concerns over the global economic stagnation, the frozen projects in Map Ta Phut industrial estate, and tax problems as factors that may affect the investment of entrepreneurs.

The extension of the Thailand Year of Investment will focus on sustainable investments especially those in the alternative energy sector as well as science and technology with hopes to upgrade the Thai industrial sector. The Thailand Year of Investment was effective from 2008-2009, succeeding in stimulating investors to request for support of 720 billion THB, which exceeded expectations.

Prime Minister Abhisit Vejjajiva said he would ask the board to consider giving support to nine new investment projects, worth 21 billion THB. These projects will manufacture automobile spare parts, coal, treated distillated aromatic extract, electricity generators, and steam and water energies for industries.

BoI Secretary-General Atchaka Sribunruang said last year most of the BoI investment support had been provided for alternative energy industrial projects. However as more investors show interest, it will slow the BoI’s process down, due to some of the investors’ limited financial ability.

Industry Minister Chanchai Chairungruang stated that in 2010 the Ministry set the goal of investment support of 500 billion THB, proposed to BOI. With BOI cooperation, all factories would be categorized by its type along with the strict use of environmental measures. All manufacturers needed to arrange for the Environmental Impact Assessment and Health Impact Assessment in every project.

Mr Chanchai said that in the meeting of BOI this 25 January, the Ministry would propose to prolong the Investment Year measure for six months. The measure could help attract foreign investment, as obviously successful in 2009 at 720 billion THB. The investment value had broken the target of 323 billion THB or 80%.

BOI Secretary General, Ms Atchaka Siboonrueng, said that during 1 Jan-16 Nov 2009 the BOI granted promotional privileges to investment projects worth altogether 370 billion baht, raising a hope that the whole-year investment would reach the anticipated target of 400 billion baht. Next year’s target is 500 billion baht.

Meanwhile, the Industry Minister, Mr Charnchai Chairungrueng, believed the Map Ta Phut problems would be solved soon after the quadri-partite committee has been appointed. He said foreign investors were no longer worried as the issue is now handled by the Prime Minister himself.

The projects in the Map Ta Phut Industrial Estate have been put on hold by a court order since the beginning of October as local people claimed they were affected by the pollution and that the projects violated environmental regulations. The case is now being investigated and resolved by the special committee.