Growth in gross domestic product has been under 3 per cent since 2013, when it was 2.8 per cent, plummeting to 0.8 per cent in 2014 and recovering somewhat to 2.8 per cent last year. The low growth is due mainly to the export sector.

Export value dropped by 0.2 per cent in 2013, 0.3 per cent in 2014 and 5.6 per cent last year.

CIMBT has cut its GDP growth forecast for this year from 3 per cent to 2.7 per cent, and predicts 2.8-per-cent growth next year.

These figures are based on the likelihood of export value this year dropping by another 4 per cent, and by 1.9 per cent in 2017.

The continuing export slump has combined with the unclear schedule for a return to democracy to damage investor confidence.

While the government has implemented some incentive measures, they have fallen short of investors’ hopes, Amonthep said.

He said the incentives aimed and attracting investment in the special economic zones and industrial clusters had failed to impress investors because of the barriers that remain, including unattractive land prices and labour costs. The SEZs are also located far from the country’s ports, which means high transport costs.

To encourage investment to boost GDP growth in the medium term, the government must strive to build confidence, he said.

This means providing clarity on political affairs after the constitutional referendum and speeding up spending on mega-projects, including showing leadership on the public-private partnerships.

The low level of public debt provides room for using fiscal policy to enhance investment, so the government should take on a more proactive role as long as the private sector is not ready yet to do so.

However, Amonthep warned against relying on low interest rates to stimulate investment. The fact is that this mechanism will not have much positive effect on loan growth, while putting the country at risk of a liquidity trap in the future.

CIMBT has suggested that the government launch consumption stimulus measures for middle-to-upper-income consumers.