Boi Applications Likely To Drop In 2006

[george]

Applications for investment promotions likely to drop sharply this year

BANGKOK: -- The value of investment projects seeking applications for the Board of Investment of Thailand (BOI)’s promotional privileges this year is expected to reduce to less than 400 billion from 800 billion as targeted earlier, according to Permanent Secretary for Industry Chakramon Phasukavanich.

He said on Tuesday that the investment project value in the first half of this year totaled 183 billion baht, a sharp drop of 53 per cent from the same period last year.

It is projected that the maximum value for the whole year will be around 400 billion baht or less, depending on investment sentiment or confidence among entrepreneurs.

However, he said the sharp drop in the project value was not unusual because the value last year surged to 700 billion baht, boosted by investment in large-scale steel and auto production projects.

“Whether the investment in the second half of this year will be more or less depends on investor confidence. Now, we have urged BOI to accelerate giving proper understanding to investors seeking applications for investment projects.

“As far as we have examined, no investors have cancelled or postpone their investment. We will also explain the current economic situation to foreign chambers of commerce starting from the American Chamber of Commerce,” he said.

Revealing the country's overall industrial and economic conditions in the first half of the year, he said the manufacturing index in the local industrial sector surged 7.5 per cent from 3.7 per cent in the same period of the previous year.

It is projected that the country's gross domestic product (GDP) in the industrial sector will be 5.5-6 per cent for the whole year, higher than 4.1-4.8 per cent projected earlier and 5.5 per cent in the corresponding period the year before.

The higher-than-expected growth stemmed from the increased exports and sound confidence among foreign investors.

Still, risk factors that should be monitored in the second half are a slowdown in local purchasing power due to higher fuel prices and interest rates and a decline in state spending owing to political woes.

--TNA 2006-07-05