(Bloomberg) -- Thailand is taking steps to attract more foreign investment to accelerate economic growth while preparing to adjust its policies to cope with potential changes to world trade under a Trump presidency, Prime Minister Paetongtarn Shinawatra said.
The Southeast Asian nation wants to position itself as a destination of choice for investments in data centers and semiconductors, Paetongtarn said, adding it has made some progress in this regard by securing commitments from companies such Alphabet Inc.’s Google and Microsoft Corp.
Thailand’s $500 billion economy is in a much better shape today than when her Pheu Thai-led coalition took power a year ago, the prime minister said. Seeking to assure the gathering of Thai and foreign business leaders at the Forbes Global CEO Conference in Bangkok on Thursday, Paetongtarn said the period of political uncertainty was over and that policy continuity is a priority for her administration.
She came to power in September after her predecessor Srettha Thavisin was ousted in a court ruling that unleashed political turmoil.
“If politics is very stable, everything is going to be more stable,” Paetongtarn said. “People are going to trust more that Thailand isn’t going to change too much. They’ll have more confidence to invest.”
The return of a civilian government after a near decade-long military backed rule has also led to a surge in investment pledges by private companies. But a raft of legal petitions against Paetongtarn and Pheu Thai Party have raised concerns about fresh political instability with the nation’s conservative royalist establishment seeking to reassert its grip on power.
Complaints Against Thai PM Pile Up as Old Guard Wields Power
Thailand’s Board of Investment has reported a 42% jump in the value of investment proposals to 723 billion baht ($21 billion) in the first nine months of this year, the highest level since 2015. Chip-designing firm Nvidia Corp. is set to unveil Thai investment plans in December, while companies such as Seagate Technology Holdings and Western Digital Corp. are looking to ramp up investment in local operations, according to officials.
“We need to make sure we’re ready for investments especially data centers and semiconductors,” Paetongtarn said, adding Thailand needs “to announce to the world we’re ready for future investments.”
The premier said her government is prepared to adjust policies to support its export sector if it gets hit by President-elect Donald Trump’s trade policies. Her assurance came a day after a study showed Thailand’s economy could potentially lose about 160.5 billion baht, shaving off about 90 basis points from its projected 3% gross domestic product growth next year.
Thaksin’s Views
The country can beat the growth target for next year as the government lifts public investments and if it can ensure political stability, Paetongtarn told a separate seminar earlier on Thursday. She vowed to complete her government’s remaining three years tenure and fresh stimulus measures early in December.
The government is laying the foundation for the country to escape the middle income trap in five years, the premier said.
Thaksin Shinawatra, Paetongtarn’s father, said if the US and China engage in serious trade competition, business relocations will happen around the world. “I already started to see the signs of Chinese manufacturers, American and Taiwanese companies wanting to relocate to Thailand,” he told the Forbes conference.
The two-time prime minister, who is seen as the de facto leader of the Pheu Thai party, said the Bank of Thailand should be doing more to help revive the economy and boost liquidity. While the central bank should remain independent, it should be willing to listen to the government, he said.
Paetongtarn’s administration and the BOT have disagreed on how best to boost Southeast Asia’s second-largest economy that’s lagged the expansion pace of its neighbors in the past decade. The two have sparred over monetary policy and inflation targets and the government has sought to tighten its grip over BOT by nominating a former minister as its new chairman.
--With assistance from Suttinee Yuvejwattana.
(Updates with comments from Thaksin from 12th paragraph.)
©2024 Bloomberg L.P.