The government is scheduled to unveil fresh tax incentives and relaxed regulations later this month to facilitate the ease of doing business and entice foreign investors who are looking to relocate their production sites to stave off the continued trade spat between the US and China.
Deputy Prime Minister Supattanapong Punmeechaow said the fresh investment stimulus measures also aim to raise the country's competitiveness for foreign investment.
"The government is aiming high with the fresh packages. Thailand will become more attractive for foreign investment, especially among investors that want to relocate their production bases," he said.
Mr Supattanapong said based on economic performance results in the fourth quarter of last year, the economy is seeing signs of recovery while foreign investment is expected to rebound this year.
State planning agency National Economic and Social Development Council (NESDC) reported on Feb 15 the economy in the fourth quarter of 2020 declined by 4.2% year-on-year, improving from a contraction of 6.4% in the previous quarter, a 12.1% fall in the second quarter and a decline of 2.1% in the first quarter.
Seasonally-adjusted, the economy grew 1.3% quarter-on-quarter from the third quarter. For the full year 2020, the economy shrank 6.1%, compared with growth of 2.3% in 2019.
Last year's 6.1% contraction was the worst full-year performance in 22 years since the 7.6% decline in 1998 from the Asian financial crisis.
The NESDC has downgraded its economic growth forecast for this year to 2.5-3.5% from 3.5-4.5% made in November, mainly because of a fresh wave of infections.
The downgrade comes despite the latest data showing the economy shrank less than expected in the fourth quarter of last year as a result of expansions in private consumption and government expenditure, following improvements in investment and the export of goods.
Mr Supattanapong said private investment is expected to become the main contribution to boosting the economy this year, with real investment from the private sector estimated at 450 billion baht for 2021.
To spur private investment in 2021, the Board of Investment (BoI) on Dec 21 last year approved additional measures, including a 50% corporate tax deduction for five years for investment projects worth at least 1 billion baht.
The BoI usually offers a maximum exemption from corporate income taxes of eight years.