BANGKOK – Thailand will step up spending on mass transit, railways and roads to counter falling exports and boost economic growth, the deputy transport minister said.
The ministry would speed up bidding for the construction of mass transit systems in Bangkok and upgrading railway networks nationwide, Arkhom Termpittayapaisith said yesterday.
The projects were part of a planned 3 trillion baht (HK$707 billion) investment in the nation’s transport infrastructure from next year to 2022, he said.
Thailand expanded 0.6 per cent in the three months to September from a year earlier, data showed this week, slower than analysts’ estimates. The government has unveiled a stimulus package of about US$11 billion and has pledged to quicken budget spending to boost domestic consumption.
“The government’s investments will be the only hope to kick-start growth again, as private consumption and investments remain very weak,” said Arkhom, who is also head of the National Economic and Social Development Board (NESDB). “Exports will take some time to return to strong growth because of the slowdown in Europe, China and Japan.”
Thailand’s economy is forecast to grow this year at the slowest pace since 2011, when thousands of factories were inundated by the worst floods in 70 years.
The NESDB, which also studies the feasibility of large infrastructure projects, has said export value this year will probably be flat, and that it expects gross domestic product growth of 1 per cent.
The monetary authority kept its policy interest rate unchanged at 2 per cent this month. Governor Prasarn Trairatvorakul said that while the current rate was accommodative for growth, it could be eased further if the economy failed to recover.
Foreign direct investment applications approved in the first 10 months of the year fell 38 per cent from a year earlier, according to government data. Finance Minister Sommai Phasee said this week an increase in value-added tax was being considered, and a crackdown on tax evasion would also help boost revenue and fund infrastructure spending.
The government would move quickly on a proposed high-speed railway linking Thailand with Laos, said Arkhom.
Prime Minister Prayuth Chan-ocha would discuss cooperation on the project with China during his visit to the country later this year, he said.
“The government’s investment on infrastructure facilities has been very low since the 1997 crisis,” Arkhom said. “The government has a strong commitment to reverse that; otherwise we will lose competitiveness to Indonesia, Vietnam and other Asean countries.”