You are here

Thailand needs to restructure its economy with investment

[BANGKOK] The level of private investment in Thailand is a worry, the country's next central bank governor said on Wednesday, and Southeast Asia's second largest economy and workforce will face problem if it does not improve soon.

Thailand's military-led government has struggled to revive Southeast Asia's second-largest economy after seizing power in a coup last May, with exports and domestic demand still sluggish.

The junta has stepped up infrastructure plans and accelerated approvals for private investment in its effort to rekindle the economy.

"The country's investment remains worrying and is not given enough interest recently. If there is no serious start (of investment), exports will not be able to compete and workforce will face problems," Veerathai Santiprabhob told a seminar.

He said recent investment had been focused on only a few industries such as telecoms, renewable energy and transport.

Foreign direct investment in Thailand flows mostly in to the service sector and foreign firms have been acquiring businesses rather than expanding new bases in the country, he added.

This month Veerathai, a former International Monetary Fund economist, was appointed as the BOT chief for five years from Oct 1, succeeding Prasarn Trairatvorakul.

Deputy Prime Minister Pridiyathorn Devakula told Reuters the economy should still grow by around 3 per cent this year, due to quickening private and government investment and rebound in tourism compensate for falling exports.

"Private investment should climb up not because of the project approved this year but because of the project approved last year," he said.