Foreign investment in Thailand plummeted last year, official data showed, the latest sign that the kingdom’s once vibrant economy continues to falter under prolonged military rule.
Total investment applied for by foreign companies between January and November last year plunged 78 percent from a year earlier to 93.8 billion baht (US$2.59 billion), figures from Thailand’s Board of Investment (BoI) showed.
The figures are unlikely to cheer Thai Prime Minister Prayuth Chan-ocha, who has struggled to kick-start the nation’s economy after seizing power in a 2014 coup.
After years of impressive growth, Thailand’s economy is struggling, mired in high household debt, stuttering exports and low consumer confidence.
It also faces stiff competition from increasingly attractive neighbors like Vietnam, Cambodia and Myanmar.
Particularly worrying for Prayut is a significant drop off in Japanese investment — historically the largest investor in Thailand — which slumped 81 percent.
EU investment also plunged from 86.7 billion baht in 2014 to just 2 billion baht last year. Investment from the US was also heavily down, while Chinese investment was only down slightly. Capital Economics Asia economist Krystal Tan said the trend was indicative of deeper fissures within the Thai economy, which was among the slowest growing in the region last year.
“The 2015 [foreign direct investment] figures are very weak, indicating foreign investor confidence in the economy remains fragile,” she said.
However, BoI deputy secretary-general Ajarin Pattanapanchai said the drop-off was due to new investment incentives, which became effective last year, favoring projects that employ high-tech, encourage innovation or strengthen Thailand’s role as a regional and international trading hub.
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