Thailand received one of the lowest foreign investments among ASEAN members, with $2.96 billion in 2023. The country’s GDP grew by 1.5% in Q1 2024, driven by private consumption and services. The NESDC revised Thailand’s annual GDP growth to 2-3% due to geopolitical risks. Indonesia, Malaysia, and Vietnam outperformed Thailand in FDI. The NESDC urges Thailand to adopt high-tech industries to boost investment. Technology is increasingly important for Thailand’s economic growth, impacting sectors like finance, tourism, and exports.
Thailand’s FDI Challenges
In 2023, Thailand recorded the lowest foreign direct investment (FDI) among ASEAN members at US$2.96 billion, according to the National Economic and Social Development Council (NESDC). To attract more investors, the council has urged the government to transition the country toward high-tech industries. The NESDC also highlighted that Thailand’s GDP grew by just 1.5% in the first quarter of 2024, the lowest in ASEAN, due to increased private consumption and the service sector. The annual GDP growth projection has been revised to 2-3% owing to risks from the US-China trade war and other geopolitical conflicts.
Regional FDI Landscape
In contrast, Indonesia led Southeast Asia in FDI with US$21.7 billion, reflecting its growing appeal to international investors. Malaysia followed with US$18.5 billion, showcasing strong economic fundamentals and a business-friendly environment. Vietnam also attracted US$8.25 billion in FDI, thanks to efforts to improve its investment climate. This highlights a stark contrast to Thailand’s lower revenue from foreign investments. The NESDC specialists noted that Thailand’s formerly dominant industries are becoming less significant, leading to a 1% contraction in exports and a 3.7% drop in the Manufacturing Production Index in early 2024.
Emphasis on Technology and Growth
Technology is emerging as a crucial factor for Thailand’s economic growth. Initiatives like the Digital Wallet Project aim to modernize the financial landscape, making transactions more efficient. The tourism sector is also leveraging digital platforms to enhance visitor experiences and streamline operations. In the export sector, technology is making an impact, especially in electronics, where Thailand has the highest export share. Moreover, technology is addressing household debt by providing innovative financial solutions. Private consumption and tourism are expected to drive GDP growth, with private investments, particularly in electric vehicles, offering additional support.
