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Applications for investment privileges down 7% in first half

Central bank decreases economic growth projection

Applications for investment privileges down 7% in first half

The global financial crisis coupled with domestic political turbulence posed major problems for the foreign investment climate in Thailand, as applications seeking investment privileges during the first half of 2009 slipped to about Bt180 billion, down seven percent from the same period of last year, Atchaka Sibunruang Brimble, secretary-general of the Board of Investment (BoI) said Saturday.
Despite the decline, Atchaka said she is optimistic that investment seeking promotional privileges from the BoI will improve during the second half of 2009 as several major firms have applied for the privileges already.
They include Bridgestone, which plans to invest more than Bt1 billion in boosting its tire output, and Samsung’s application to raise its investment by about Bt3 billion, she said.
Also, the World Bank has forecast that Thailand’s economy would turn around and grow 1.8 percent during the fourth quarter this year, which would in turn help improve tourism, Atchaka said. She said she hoped the current virus siege would not greatly impact the tourism industry.
Touching on earlier remarks by Industry Minister Charnchai Chairungrueng that foreign investment in Thailand will soar to Bt490 billion, she said the figures were probably derived from talks between the minister and prospective foreign investors. That level of investment would probably be achieved after a time, she said.
The BoI has moved its investment target for 2009 to Bt450 billion, down from the Bt650 billion goal set earlier this year. (TNA)


Central bank decreases economic growth projection

The Bank of Thailand (BoT) has revised its economic growth estimate for this year downward to 3-4.5 percent from the 1.5-3 percent forecast earlier, citing the presence of many critical risk factors which the economy now faces.
BoT Deputy Governor Atchana Waiquamdee said the factors include the slower-than-expected global economic growth, possible failure by the government to disburse its budget to stimulate the economy, political uncertainties, the ongoing A(H1N1) influenza pandemic that affects tourism and private-sector consumption, and rising oil prices.
These factors could undermine both corporate earnings and the purchasing power of consumers.
“The economy looked more stable in the first two months of the second quarter and we believed it had already bottomed out. Still, the negative growth of the gross domestic product at 7.1 percent in the first quarter is worse than expected,” Atchana said.
However, she revealed that the central bank had increased the GDP projection for next year to 3-5 percent from 1.5-3 percent expected earlier since it is projected the global economy will recover and grow 3.4 percent next year.
Atchana said the Thai economy is likely to enjoy positive growth in the fourth quarter this year because exports will tend to decline at a slower pace, the second phase economic stimulus scheme will benefit the economy and the government speeds up its budget disbursements.
Private-sector consumption is expected to drop further by 1-3 percent and private investment to shrink by 17-19 percent.
Exports are forecast to contract 19.5-22.5 percent and imports to shrink 29-32 percent, resulting in a trade surplus of US$15-18 billion and a current balance surplus of the same amount.
She affirmed the central bank had closely monitored the baht movement.
Atchana shrugged off criticism that exports had dropped sharply because of the stronger baht, saying the plunge was not mainly due to the baht’s rise.
Whether exports would grow favorably depends on the global economic situation and the economic expansion of Thailand’s trade partners. (TNA)