Thai Finance ministry urges private sector to invest more

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Finance ministry urges private sector to invest more

BANGKOK, 2 June 2016 (NNT) - The Ministry of Finance has forecast that Thai people will earn 40,000 baht a month each in the next 17 years while encouraging the private sector to invest more within this year.

Permanent Secretary for Finance Somchai Sujjapongse said in a seminar by the Bank of Ayudhya that the government’s short-term economic stimulus measures had made the 1st quarter’s GDP expand by 3.2%. The government wanted the economy to grow to its full potential and develop the country in a sustainable manner according to the “4.0 Thailand” strategy. Therefore, there must be additional measures such as the extension of investment incentives, said the permanent secretary.

The government recently extended its investment promotion measures until the end of this year in order to stimulate investment by the private sector. By the year 2032, Thai people’s monthly income is expected to reach 40,000 baht per person and low-income people are expected to earn more than 15,000 baht a month a person.

Governor of the Bank of Thailand Wirathai Santipraphob said the Thai economy this year would gradually recover and predicted that the Thai economic growth would expand by 3.1% in 2016. However, he said the Thai export sector was still sluggish following Chinese and Asian economic slowdowns. The governor noted that the government’s continuous investment would help stimulate private investment in the third and fourth quarters as planned and help increase Thailand’s competitiveness.

The ministry announced that the inflation rate in May 2016 was 0.46%, a positive figure for two consecutive months. It also expected that the inflation rate would return to 1% at the end of this year due to increasing oil price. The ministry confirmed that the central bank’s flexible inflation targeting framework was suitable for the Thai economy.


-- NNT 2016-06-02

[shirtless]

Why should the private sector take this risk the Thai economy is in real trouble.

[BigBadGeordie]

So by 2032, that's 16 years from now low income earners are expected to earn 15,000 a month.

Currently the minimum wage is 300 Baht a day (30x300), 9,000 Baht a month.

So in 16 years it will rise to 15,000 a month (15,00÷30) or 500 Baht a day.

I am sure these people are truely excited by this prospect and moving out of poverty.

[bobmac10]

The private sector is not stupid

They don't listen to what some unappointed official says

They like to have a stable political situation which decreases the risk of investing in large projects

Any observer can see the current regime is not providing that stability

Until Thailand returns to a stable democracy the investment drought will continue

However the PM appears to be not listening

[klauskunkel]

Thai Finance ministry urges private sector to invest more

invest in what? look thep dolls? amulets? ah, I got it, lottery tickets!

[Jimbo2014]

Come one come all. Have I got a deal for you! ??. The best part about asking other people to spend their money is that you don't loose money yourself. Although I have good faith in the good doctors projections I'll be putting my hard earned mulch elsewhere.

[chainarong]

The private sector is not stupid

They don't listen to what some unappointed official says

They like to have a stable political situation which decreases the risk of investing in large projects

Any observer can see the current regime is not providing that stability

Until Thailand returns to a stable democracy the investment drought will continue

However the PM appears to be not listening

How can the Unelected PM listen , we all hate him, those R his words not mine.

[mtls2005]

The private sector can easily invest in other countries, where there may be greater returns, and where there are no restrictions. Insert ironic emoji here.

Almost every large, publicly traded Thai firm has been expanding outside Thailand, from AoT, to CP, to KingPower.

[chainarong]

Makes my 375,000 a month seem like a pittance against 40,000 in 16 years time, no one has included inflation , the people have gained SFA., possibly have eroded what they get now........................................

[chainarong]

What is the end result if inflation is at @ 2.5 % per year over 16 years, if you earn 9,000 baht per month at present = ???

[Bob12345]

Thai Finance ministry urges private sector to invest more

invest in what? look thep dolls? amulets? ah, I got it, lottery tickets!

Good question, and of course there is no answer to found.

Should businesses invest in more production capacity, education of workers, automation, financial buffers, storage space, electronic bookkeeping systems, oversight, fire prevention, or something else?

It would help to know because it has a huge impact on how the country will develop.

If both the private sector and government agree on a way to go you can see some real change, but if the private sector invests in high-tech operations while the government lacks improving the educational levels in the country it will be a disaster in the making.

[gandalf12]

So by 2032, that's 16 years from now low income earners are expected to earn 15,000 a month.

Currently the minimum wage is 300 Baht a day (30x300), 9,000 Baht a month.

So in 16 years it will rise to 15,000 a month (15,00÷30) or 500 Baht a day.

I am sure these people are truely excited by this prospect and moving out of poverty.

And by 2032 everything will be twice the price it is now

[Srikcir]

Deputy Prime Minister Somkid Jatusripitak said in May 2016 that investment by the private sector remained low during the first quarter of 2016, while budget disbursement by government offices rose 12 percent from a year ago, which is the highest in many years.

So there is apparently a disconnect between government investment and private sector investment. Private investors don't seem encouraged by the government's expensive stimulus efforts. Maybe because the Prayut government has nothing to lose - it can just keep floating more treasury bonds for capital.

But for the Thai risk-adverse private sector, stakeholders have capital limits. They have to weigh risk of return of investment and return on investment. That risk will consider alternative investment options such as moving more into ASEAN markets away from Thai markets. Too many Thai investors flee Thailand may cause a tipping point wherein the Prayut government will begin nationalizing portions of the private sector, a la Venezuela style, to force retention of domestic investments. That didnt' work well for Venezuela.