Thailand’s proposed mega projects: weighing the costs
Private sector investment in all three projects should positively impact the economy but further study is needed
Three economists have spoken out in favour of the government’s three mega-projects – the land bridge, entertainment complex and land reclamation – which they regard as positive momentum for Thailand’s economy, but also point to the need for careful evaluation of all the options.
Pipat Luangnaruemitchai, managing director and chief economist of Kiatnakin Phatra Financial Group (KKP), believes that allowing private sector investment without subsidies or income compensation for the Entertainment Complex project would positively impact the economy by attracting substantial foreign capital and driving long-term economic growth, but says he’s concerned about the potential “moral” considerations.
“In terms of economic stimulus, allowing the private sector to take the lead would likely be worthwhile.
However, how will the moral concerns be managed, and what will be the future impact on Thai society? These are critical issues for the government to carefully consider.”
Noting that the Land Bridge project could greatly benefit the economy, he added that much would depend on whether the construction is undertaken by the government or the private sector, as this affects the future investment return. If entirely privately funded, it may be more economically viable.
As for the land reclamation project to create new islands and reduce flood risks, the economic impact remains uncertain as the details are still unclear, but appropriate flood prevention measures will obviously benefit the country.
“The government’s economic stimulus plans, including the digital wallet scheme and the 2025 budget, are seen as helping to boost the economy. However, with significant public spending, caution must be exercised regarding the fiscal ceiling, as the 2025 budget and digital wallet spending could push public debt close to 70% of GDP,” he pointed out.
Amonthep Chawla, senior executive vice president and head of research at CIMB Thai Bank, stated that regardless of whether the three mega-government projects proceed, the Eastern Economic Corridor (EEC) project, and the Chumphon deep-sea port, require further investment. This is necessary to ensure connectivity with the western region and link to the Thai-China railway whether or not the land bridge project is realised.
As for the entertainment complex and land reclamation projects, although their feasibility remains unclear, he believes they represent additional investment opportunities.
“In the short term, Thailand's GDP is expected to grow at around 2.5-3%. With strong stimulus, there could be a temporary increase, but it will eventually decrease. Whether these mega-projects will push growth back to 4-5% is still too early to assess,” Amonthep said.
For his part, Paiboon Nalinthrangkurn, CEO of Tisco Securities and president of the Investment Analysts Association (IAA), said the entertainment complex project has a positive outlook for Thailand, as in the future, there will be opportunities for substantial growth, with tourism as a key attraction. These developments could stimulate the Thai economy. However, further studies are needed to evaluate if this and the other two mega projects will be cost-effective.
“If these mega-projects proceed clearly, they will create greater hope for long-term economic growth in Thailand, driven by large-scale public investments. This would provide positive momentum for the Thai stock market, which typically responds in advance,” he said.
