Thailand targets investment-led economic growth as PM plans Trump era

Thailand is taking steps to attract more foreign investment to boost economic growth while preparing to adjust its policies to cope with potential changes to global trade under a Trump presidency, Prime Minister Paetongtarn Shinawatra said.

The Southeast Asian country wants to position itself as a preferred destination for investment in data centers and semiconductor manufacturing, Paetongtarn said, adding that it has made some progress in this regard, having received commitments from companies such as Google and Alphabet’s Microsoft.

Thailand’s $500 billion economy is in much better shape today than when the Pheu Thai-led coalition took power a year ago, the prime minister said. In an effort to ensure a meeting between Thai and foreign business leaders, Paetongtarn said the period of political uncertainty is over and that policy continuity is a priority for her administration.

She took power in September after her predecessor Sretta Taweesin was removed from power by a court order, sparking political unrest.

“If the policy is very stable, everything will be more stable,” Paetongtarn said. “People will have more confidence that Thailand is not going to change too much. They will have more confidence in their investments.”

The return of civilian government after nearly a decade of military-backed rule has also led to a surge in investment pledges from private companies. However, a series of lawsuits against Paetongtarn and the Pheu Thai Party have raised concerns about further political instability as the country’s conservative royalist establishment tries to reassert its power.

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The Thailand Board of Investment reported a 42 per cent jump in the value of investment proposals to 723 billion baht (S$28 billion) in the first nine months of this year, the highest level since 2015. Chip design firm Nvidia is set to unveil Thai investment plans are scheduled for December, officials said, while companies such as Seagate Technology Holdings and Western Digital are seeking to increase investment in local operations.

“We need to make sure that we are ready for investment, especially in data centers and semiconductors,” Paetongtarn said, adding that Thailand needs to “announce to the world that we are ready for future investment.”

The prime minister said her government was prepared to adjust policies to support its export sector if it suffered from 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, cutting about 90 basis points from its projected 3 percent gross domestic product growth next year.

The country could exceed its growth target for next year if the government increases public investment and can ensure political stability, she said at a separate seminar earlier on Thursday (Nov 21). She has promised to complete the remaining three years of her government’s term and introduce new stimulus measures in early December.

The government is laying the groundwork for the country to escape the middle income trap in five years, the prime minister said. BLOOMBERG