During 2H14, the government sector's construction policy began on a clearer direction with more emphasis on infrastructural development to heighten our trade and investment potential and to keep our economic momentum going. Both objectives will help us in keeping abreast of market challenges toward AEC integration in 2015. The government has forced through a plan to expedite transportation infrastructure for implementation during 2014-2015 per their THB2.4-trillion infrastructure plan starting in 2015 and ending in 2022. The state has also introduced new stimuli for 2014-2015 comprising five measures that will use a total budget of THB364.46 billion. The idea is to expedite budgetary disbursements allocated to governmental agencies and state enterprises for use in renovation work on state buildings nationwide, as well as to support low-income farmers.
We at KResearch, however, believe that such expediency in disbursements will probably produce only limited impact on construction activity over the remainder of 2014. Therefore, we project an aggregate investment for state construction during 2H14 at somewhere between THB228-235 billion, growing 4.8-8.0 percent YoY. Subdued investments during 1H14 at (-)4.8 percent lower will bring the total growth rate for the entirety of 2014 to a meager 0.02-1.7 percent YoY.
In 2015, the above measures will bring the total investment on state construction up to THB464-477 billion, growing over 2014 by 7.0-10.0 percent.
Next year, the government will continue investments in existing projects but only limited budget will likely be allocated for new projects. A close watch will be needed on new construction in the pipeline, which will depend largely on government initiatives.
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