By Kitiphong Thaichareon
BANGKOK (Reuters) – Thailand is planning additional measures to boost investment to support Southeast Asia’s second-largest economy hit by weak exports and a strong baht <THB=TH>, its deputy prime minister said on Wednesday.
The country needs higher private investment, which has been low at only 16% of gross domestic product (GDP), Somkid Jatusripitak told a business seminar.
“We have to stimulate private investment at a time of the strong baht,” he said. “I’ve already talked with the customs and revenue departments, and there will be a package,” he added.
The Board of Investment (BOI) is working on the package, which will be offered to firms that must invest within six months and install equipment within a year.
Thailand usually promotes investment with tax incentives. The BOI’s board will meet on the package early next month, the agency has said.
Last year, the government launched a relocation package, including tax breaks and special investment zones, to draw foreign companies seeking to move production due to Sino-U.S. trade tensions.
Thailand’s trade-reliant economy has been hit by global trade tensions. A strong baht, which was Asia’s best performing currency with a nearly 9% rise against the U.S. dollar in 2019, has cut export competitiveness.
In bid to lift growth, the government aims to accelerate spending of 1 trillion baht ($33.04 billion) in the current quarter, Somkid said.
Spending has been slow as the 2020 fiscal budget, which was due to start last October, just won parliamentary approval on Saturday. Budget approval was impeded by the delayed formation of a new government after an election in March.
Growth in the final quarter of 2019 was particularly affected by the delayed budget, which has stalled large investment projects, he said.
Official 2019 gross domestic product data is due on Feb 17.
The central bank estimated 2019 growth at 2.5%, a five-year low, and forecast 2.8% growth for this year.
(Writing by Orathai Sriring; Editing by Jacqueline Wong)