Thailand Aims to Boost Global Competitiveness, Enhance Investment Quality, and Raise Growth Rate

Finance Minister Ekniti Nitithanprapas announced that Thailand aims to break into the top 20 in global competitiveness rankings within the next four years, up from its current 26th position. The government also seeks to boost the country's potential economic growth rate to over 3%, from the 2.7% estimated by the Bank of Thailand. Speaking at a Stock Exchange of Thailand (SET) seminar on Tuesday, Mr. Ekniti stated that the Board of Investment's (BoI) investment strategy is no longer focused primarily on the number or value of investment projects, but rather on the quality of investment, including technology transfers. He cited Chinese electric vehicle (EV) manufacturers choosing Thailand as their first location outside China to produce right-hand-drive EVs, while utilizing the nation's domestic supply chain. Regarding clean energy, a key factor in attracting data center investments, Mr. Ekniti mentioned that the National Energy Policy Council approved measures last week to unlock direct power purchase agreements (PPAs). These measures allow industrial users to buy electricity directly from power producers and enable renewable energy producers to sell excess electricity back to the grid via the authorities' transmission system under a third-party access framework. Furthermore, the BoI has launched an initial public offering (IPO) initiative to encourage foreign investors in Thailand to raise capital through the Thai market instead of listing elsewhere. The goal is to increase listings on the SET, particularly for technology companies. "Investment capital continues to flow into Thailand because the country is able to trade with all nations," Mr. Ekniti said. "Geopolitical and economic tensions have divided the world into multiple blocs. As a result, investors are seeking safe destinations for investment." He drew a parallel to the 1980s, when the appreciation of the Japanese yen prompted Japanese manufacturers to relocate production overseas, including to Thailand, which led to the development of Thailand's industrial base, particularly its automotive industry and supply chain. Efforts to streamline investment approvals through the Thailand FastPass facilitation measure have increased investment flows into the economy, lifting economic growth in the fourth quarter of last year to 2.4-2.5%, compared with an earlier projection of 0.3-0.4%. In addition, private sector investment expanded by 10% in the first quarter of this year. "In the past, Thailand's economy was export-led. When exports contracted, the economy suffered. Today, Thailand's economy is investment-led," he noted. Thailand's economic recovery is being driven efficiently by increased domestic investment, prompting rating agencies to revise Thailand's outlook from negative to stable. This has contributed to approximately 60 billion baht in capital inflows into the SET over the past two to three weeks, Mr. Ekniti said. Global investors are not concerned about Thailand's public debt, but rather whether the government has sufficient new investment engines to sustain economic growth, he added.