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Economy

Bangkok approves $14bn of projects in effort to lift economy

New investment in Thailand's Eastern Economic Corridor expected to attract FDI

A general view of Laem Chabang port, east of Bangkok.   © Reuters

BANGKOK -- The Thai government has approved four infrastructure megaprojects in an effort to rev up new investment in the country's Eastern Economic Corridor.

The four projects, worth a combined 470 billion baht ($14 billion), are expected to help accelerate foreign direct investment to support the country's economy at a time when trade disputes and uncertain external factors weigh on the country's growth.

The government has announced a total of five megaprojects to be constructed in the EEC area. The first one, a $7 billion high-speed train line to link the country's three major airports, was approved earlier this year.

The four newly approved projects are: U-Tapao aviation city (290 billion baht), to begin operations in 2023; a maintenance, repair and overhaul center (10.6 billion baht) to open in 2022; the third phase of Laem Chabang seaport (114 billion baht) to open in 2023; and the third phase of Map Ta Phut seaport (55.4 billion baht), to launch in 2025. 

"We want to see concrete development of the EEC, as we want it to play a major role in driving the country's economy," said Industry Minister Uttama Savanayana.

He added that the government also plans to hold exhibitions in France and England in November to attract new investment, since the government has set a target of foreign direct investment in the EEC area of at least 100 billion baht in 2019.

In the longer term, the government expects total new investment to be worth up to 300 billion baht.

The approval of all four projects is an acceleration to push the EEC project forward and make it a major engine to drive the country's economic growth, particularly as exports and other economic indexes are starting to fall.

Exports fell 5.2% year-on-year in September, the first drop in 19 months, according to the Commerce Ministry, while the manufacturing production index fell 2.6%, the first drop in 17 months.

Moreover, the number of foreign tourists will fall by an estimated 1.5 million to 39.5 million this year, due largely to a decline in Chinese arrivals, signaling weakness in the tourism industry, which accounts for around 20% of the country's gross domestic product.

Analysts said the projects in the EEC are expected to play a major role in supporting the Thai economy, which is amid the ongoing trade war between China and the U.S., as well as other external factors starting to erode the country's growth. 

"Revving up the EEC could at least lend support to the Thai economy in general as new investment could help offset falls in other economic sectors," said Adis Israngkura of the National Institute of Development Administration.

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