The government's bio-circular-green economy (BCG) development scheme is expected to contribute 1 trillion baht to the gross domestic product (GDP) in four BCG business groups and increase the workforce by 3.5 million workers over the next five years, says Krungthai Compass, research house under Krungthai Bank (KTB).
The government's BCG economy development project focuses on four local industries, including agriculture and food, healthcare and medical sector, energy and biomaterials, and tourism and the creative economy.
Krungthai Compass predicts the BCG model will expand the GDP of these industries to 4.4 trillion baht, which will account for 24% of Thailand's GDP in 2026.
Moreover, the BCG model is expected to boost the number of people employed by 3.5 million to 20 million in 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 mutual fund investments under BCG or ESG [environment, social, and governance] globally," he said.
Even though the pandemic has delayed some BCG investment projects of corporates, particularly in the tourism sector, Krungthai Compass expects the government to be able to contain the number of new infections so that the BCG investment projects can resume.
He said the government and related authorities have supported BCG economy development and BCG-related investment projects through several promotional programmes. Meanwhile, the local private sector has been paying more attention to BCG investments, especially in green and alternative energy projects.
At the same time, the local financial institutions have supported corporate firms on BCG project finance. Commercial banks have also supported corporate customers on green bond issuance.
Mr Phacharaphot said logistics is another key sector that has high potential to expand BCG-related investments in accordance with the government's infrastructure system in railway and water transportation projects.
BCG projector investment will help move the country's value chain and contribute to the Thai value-added economy, he said.
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 Carbon Border Adjustment Mechanism of the European Union.