Applications for investment promotion in 2023 soared to a five-year high of 848 billion baht, an increase of 43% from the previous year's adjusted number, fuelled by substantial foreign investments within the five priority sectors outlined in the Board of Investment's (BoI) new Investment Promotion Strategy.
The relocation trend in key industrial sectors driven by ongoing geopolitical issues and the Thai government's aggressive investment promotion policy accelerated a huge growth of Thailand's foreign direct investment (FDI) to 663 billion baht, representing a 72% increase in the FDI value compared to 2022.
"Thailand's potential and readiness, together with the new 5-year investment promotion strategy and measures, have attracted large investments by companies seeking to relocate to a safe and resilient long-term base for their investments. Moreover, the fact that Prime Minister Srettha Thavisin himself led several investment promotion roadshows has significantly raised investors' confidence and put Thailand on the radars of key investment communities," Narit Therdsteerasukdi, secretary-general of the BoI, said on Tuesday after a board meeting at Government House
"Looking forward to 2024, it is predicted that the Thai economy will expand, supported by the expansion of exports and tourism revenue. We also believe investments are likely to grow due to the continued flow of FDI, especially in our priority sectors."
The board meeting, chaired by Parnpree Bahiddha-Nukara, deputy prime minister and chairman of the BoI, also approved four investment promotion applications worth a combined 29.7 billion baht for projects comprising two data centres, the production of steel wire for the tyre industry, and the production of steam for industrial use.
According to the BoI's statement, the total number of applications for investment promotion filed last year by investors, both local and foreign, increased 16% to 2,307 projects, worth a combined 848 billion baht investment, up 43% from a revised 591 billion baht in 2022. The rise in total value reflects the growing number of large projects, mostly from overseas.
The five priority sectors defined by the new strategy the BoI enacted last year, namely bio-circular-green, electric vehicles (EV), smart electronics, digital and creative, together attracted 759 applications, worth a combined 492 billion baht of investment, or 58% of the total value of investment pledges.
Last year saw foreign investors file a total of 1,394 applications for investment promotion, an increase of 38% from the previous year, and an increase of 72% in combined investment value to 663 million baht, due to a significant number of large projects.
As in the previous year, investment applications from China came first in the ranking of FDI sources by investment value, with 430 projects worth a combined investment of 159 billion baht, or 24% of the total value of FDI applications in the period, boosted by Chinese investments in the electronics industry, and the automotive supply chain, including EV.
Singapore came in second with 194 projects worth a combined 123 billion baht of investment, boosted by large project applications from Singapore-based affiliates of international companies in sectors including solar cells and electronics.
Investments from the US ranked third with 40 projects worth a combined 83.9 billion baht.
Japan came in fourth with 264 projects representing a combined value of 79.1 billion baht, a 60% increase from the previous year.
Taiwan ranked in fifth position with 54.6 billion baht from a total of 94 projects.
In a separate development, Mr Narit said on Tuesday that the BoI has received an appeal from Asia Era One, a CP-led consortium, for extensions of investment promotion privileges in the high-speed railway linking three airports.
It is preparing to negotiate with the Eastern Economic Corridor Office and the State Railway of Thailand, and is expected to conclude this month.
Mr Narit said the BoI will further discuss the details with the company regarding the status of amending the joint venture agreement and the necessity of extending time. Additionally, discussions will take place with the Eastern Economic Corridor office and the SRT to explore solutions to the issues.
Narit Therdsteerasukdi, secretary-general of the BoI.