Investment 'will hit 2008 target'

In an interview with The Nation, secretary-general Satit Charnjavanakul said net applications in the first five months indicated that Thailand was still an attractive destination for both local and foreign investors.

The BoI announced total net applications in the first five months were worth Bt189.8

billion, up slightly from Bt189.7 billion in the same period

last year. The number of applications submitted increased from 525 projects to 556 projects

this year, which were mainly

driven by investments in service and infrastructure industries.

"However, it is difficult to predict the trend of investment for the rest of the year due to the rapidly changing oil price and global inflation," Satit said.

He still believes the political turmoil will not be the main concern for both local and foreign investors. "The turmoil may partly affect companies that focus on selling their products in domestic markets and newcomers from abroad, but in the overall picture we have not seen a serious effect yet," he said.

The BoI will focus on promoting value-added projects in the automotive and electronics industries as well as in knowledge-based industries such as biotechnology and renewable energy.

Last week the Japanese Chamber of Commerce and Japan External Trade Organisation (Jetro) reported the result of their economic survey of Japanese firms in Thailand. The business sentiment was found to have been continuously "improving" through the end of May, while it was predicted to spiral down for the rest of the year due to several factors, including the oil prices, high inflation and political instability.

On the political front, previous Jetro president Yoichi Kato said: "We are worried that the protests will probably suspend the government's decisions on economic policy, so political stability is one of the key factors to lift foreign investors' confidence. If the situation is prolonged and more violent, it is possible that some developed countries will put pressure on Thailand."

So far, the Japanese are the largest group of foreign investors, with investments mostly in the automotive, auto-parts, electronics and steel industries.