Moody's: EEC a boon to Thailand
Moody's Investors Service says the government's investment flagship Eastern Economic Corridor (EEC) is credit-positive for Thailand, says Warotai Kosolpistkul, fiscal policy adviser to the Fiscal Policy Office (FPO).
The international credit rating agency had representatives visit the EEC Office, he said.
The much-touted EEC scheme was approved by the cabinet in June 2016, and is aimed at reviving the success of the Eastern Seaboard Development Project, which began in the early 1980s. The EEC scheme spans 110,168 rai, covering 30 existing and new industrial zones, while the government expects investment value of 1.7 trillion baht in three eastern provinces: Chachoengsao, Chon Buri and Rayong.
The corridor's 10 targeted industries comprise next-generation cars; smart electronics; affluent, medical and wellness tourism; agriculture and biotechnology; food; robotics for industry; logistics and aviation; biofuels and biochemicals; digital; and medical services.
Mr Warotai said Moody's indicated politics is no longer a threat to the Thai economy, which could pick up under the regime.
Thailand's economic growth expanded at the fastest clip in five years to 4.8% year-on-year for the first quarter, up from 4% in the previous quarter. The National Economic and Social Development Board raised its 2018 economic growth forecast to 4.2-4.7% from 3.6-4.6% predicted in February, and the FPO upgraded its growth outlook to 4.5% from 4.2%.
Soraphol Tulayasathien, director of the bureau of macroeconomic policy under the FPO, said economic momentum continued into April, underpinned by exports, domestic consumption and private investment.
Passenger car sales, a proxy for private consumption, expanded 17.2% year-on-year in April, marking the 15th straight month of growth. Value-added tax (VAT), another indicator of private consumption, surged 7% year-on-year in April. The higher VAT collection could be attributed to a rise in VAT on both domestic consumption and imported goods.
Exports continued growing, with a 12.3% year-on-year increase in April, he said.
The cabinet also recently approved a medium-term fiscal plan under the Fiscal Responsibility Act, in effect since April 20. Under the plan, the ratio of public debt to GDP is limited to 60%, with government's debt liabilities capped at 35% of estimated revenue for that fiscal year, while foreign-denominated public debt must not exceed 10% of overall public debt and 5% of exports and services.