The government’s bio-circular-green economy (BCG) development program is expected to contribute 1 trillion baht to the gross domestic product (GDP) of four BCG business groups and increase the workforce by 3 , 5 million workers over the next five years, says Krungthai Compass, a research firm under Krungthai Bank (KTB).
The government’s BCG Economic Development Project focuses on four local industries, including agriculture and food, healthcare and medical, energy and biomaterials, tourism, and the creative economy.
Krungthai Compass predicts that the BCG model will bring the GDP of these industries to 4.4 trillion baht, which will represent 24% of Thailand’s GDP in 2026.
In addition, the BCG model is expected to increase the number of people employed from 3.5 million to 20 million by 2026, said Phacharaphot Nuntramas, chief economist at Krungthai Compass.
“The BCG model is a global megatrend and it will be a new growth engine for the Thai economy in the future. We can see strong growth in investment in mutual funds under BCG or ESG. [environment, social, and governance] globally, ”he said.
Even though the pandemic has delayed some corporate BCG investment projects, especially in the tourism sector, Krungthai Compass expects the government to be able to contain the number of new infections so that BCG investment plans can resume.
He said the government and related authorities have supported the development of BCG economy and investment projects related to BCG through several promotional programs. Meanwhile, the local private sector has paid more attention to BCG investments, especially in green and alternative energy projects.
At the same time, local financial institutions have supported companies in financing BCG projects. Commercial banks have also supported corporate clients when issuing green bonds.
Mr. Phacharaphot said that logistics is another key sector which has high potential to develop BCG related investments in line with the government’s infrastructure system in rail and river transport projects.
Investing in BCG spotlights will help shift the country’s value chain and contribute to Thailand’s value-added economy, he said.
The BCG-related development will also help strengthen Thailand’s competitiveness in the global market and reduce the pressure of global trade rules on Thailand, such as the European Union’s Carbon Frontier Adjustment Mechanism.