BOI: Japanese investment applications surge 146% to 119bn baht, optimism grows for Thailand’s 2026 rebound

Board of Investment (BOI) secretary-general Narit Therdsteerasukdi said a survey by JETRO Bangkok found Japanese companies in Thailand expect the economy to improve in the first half of 2026, compared with the previous six quarters.

The survey, conducted among more than 520 firms in November-December 2025, attributed the brighter outlook to a recovery in production and consumption, particularly driven by new business opportunities across several industries. Sectors expected to perform better include automotive, electronics, chemicals, food, trading, and financial services.

According to the findings, 23% of respondents plan to increase investment in Thailand this year, 35% expect exports to rise, and 26% are considering establishing a regional office in Thailand.

On external risks—particularly US reciprocal tariffs—44% of Japanese firms said they have not been affected, while 26% said they have been, or expect to be, affected. Most businesses (54%) said they would maintain their existing strategy in response, followed by measures such as passing costs on through prices, expanding into domestic and alternative markets, and improving operational efficiency—suggesting investors are cautious but not alarmed amid global trade uncertainty.

Regarding the recent closure of Thai-Cambodian border checkpoints, more than 67% said there was no significant impact, while 25% reported disruptions to logistics and production due to previous overland shipments between the two countries. The main adjustments included switching to sea freight or rerouting land transport via Laos and Vietnam.

The survey also listed areas investors want Thailand to prioritise to improve the investment climate, including stimulating domestic consumption, addressing household debt, improving tax audit and refund efficiency, and upgrading transport infrastructure—alongside broader expectations for economic stimulus paired with infrastructure investment to strengthen long-term competitiveness.

Narit said the survey results align with a sharp rise in Japanese investment applications in 2025, with 311 projects—up 17% year on year—and total investment value exceeding 119 billion baht, a 146% increase from 2024. Most investment went into automotive and parts, electronics, and digital sectors, reinforcing Thailand’s role as a key Japanese production base in ASEAN.

By sector, automotive and parts remained a major driver, with investment of 28.332 billion baht (+57%), reflecting an extension of Thailand’s strong internal-combustion base into hybrid electric vehicles (HEVs), where sales have been rising quickly. Electronics and electrical appliances also expanded strongly, with investment of 24.318 billion baht (+121%), including advanced components—particularly for electric vehicles—and high-precision electronics.

Digital investment rose sharply from 42 million baht in 2024 to more than 7.6 billion baht in 2025, driven by large data-centre projects supporting the digital economy and AI—such as Telehouse, which provides data-centre services for data processing and cloud systems.

He added that other notable Japanese-backed applications in 2025 included aircraft parts, high-grade steel, food and beverages, renewable energy, and joint ventures to develop industrial estates—along with large automotive projects invested through Japanese subsidiaries in Singapore.

Despite heightened global uncertainty, Narit said Japanese investors remain confident in Thailand’s potential and continue to treat it as a long-term investment base, with more than 6,000 Japanese companies operating in the country. He said investment is increasingly shifting towards new technologies, including hybrids and components, semiconductor assembly and testing, printed circuit boards (PCBs), aircraft parts, biotech products, data centres, and renewable energy—adding that the BOI will work more closely with Japanese investors to expand high-quality investment, strengthen domestic supply chains, and boost Thailand’s long-term competitiveness.