Thailand received the lowest foreign direct investment (FDI) among ASEAN members in 2023, totaling just US$2.96 billion, according to the National Economic and Social Development Council (NESDC). This low ranking shows the need for Thailand to transition to high-tech industries to attract more investors.
The country’s GDP grew by 1.5% in the first quarter of 2024, which is the lowest among ASEAN members. This growth was primarily driven by increased private consumption and the service sector. Consequently, the NESDC revised Thailand’s annual GDP growth projection to 2-3%, citing risks from the US-China trade war and geopolitical conflicts.
In comparison, Indonesia led ASEAN with US$21.7 billion in FDI, followed by Malaysia with US$18.5 billion, and Vietnam with US$8.25 billion. Thailand’s low FDI inflow has affected its exports, which contracted by 1% in the first quarter of 2024, and the Manufacturing Production Index declined by 3.7% for six consecutive quarters.
Technology is becoming a key factor for Thailand’s economic growth, with initiatives like the Digital Wallet Project aiming to modernise the financial landscape. The tourism sector is also leveraging digital platforms to enhance visitor experiences and streamline operations, crucial for competing in the post-pandemic global market. Additionally, the export sector, particularly electronics, is benefiting from technological advancements.
Private consumption and tourism are expected to remain the main drivers of GDP growth, with private investment in the electric vehicle sector anticipated to support this growth further. NESDC officials have advised the government to promote incentives for the manufacturing industry by encouraging the creation of new technological products, enabling Thailand to compete in the technological markets of Southeast Asia.
As Thailand faces challenges in attracting foreign investment, a strategic shift towards high-tech industries and technological advancements in key sectors could enhance its economic future. By fostering an environment conducive to innovation and investment, Thailand aims to improve its FDI ranking and overall economic growth within the ASEAN region.
