Foreign investment in Thailand plummeted last year, official data showed, the latest sign that the kingdom's once-vibrant economy continues to falter under prolonged military rule.
Total (Swiss: FP.SW - news) investment applied for by foreign companies between January and November 2015 plunged 78 percent from a year earlier to 93.8 billion baht ($2.62 billion), according to figures from Thailand's state-run Board of Investment (BoI) sent to AFP late Tuesday.
The figures will do little to cheer junta leader Prayut Chan-O-Cha, who seized power in a May 2014 coup vowing to restore stability but who has struggled to kickstart the country's lacklustre economy.
After years of impressive growth, Thailand's economy is struggling, mired in high household debt, stuttering exports and low consumer confidence.
It (Other OTC: ITGL - news) also faces stiff competition from increasingly attractive neighbours like Vietnam, Cambodia and Myanmar.
Particularly worrying for Prime Minister Prayut is a significant drop off in investment from Japan -- historically the largest investor in Thailand by far -- which slumped 81 percent.
EU investment also plunged from 86.7 billion baht in 2014 to just 2 billion baht last year. Investment from the United States was also heavily down, while Chinese investment was only down slightly.
Krystal Tan, an Asia economist with Capital Economics, said the trend was indicative of deeper fissures within the Thai economy, which was among the slowest growing in the region last year.
"The 2015 [FDI] figures are very weak, indicating foreign investor confidence in the economy remains fragile," she told AFP.
"More broadly, Thailand's economic competitiveness is on the decline," she added. "The country continues to face significant challenges on the political front that have negative repercussions for business and investor confidence."
But BoI deputy secretary general Ajarin Pattanapanchai said the drop-off was due to new investment incentives, which became effective in 2015, favouring projects that employ high-tech, encourage innovation, or strengthen Thailand's role as a regional and international trading hub.
"The projects that we got last year were not much, but almost 70 percent were in our target sector," she told AFP, adding that the Board had expected FDI inflow in 2015 to take a hit.
"We understood that it would drop, we prepared for it, but it's still a little bit below what we expected," she said.
Thailand has historically been a top choice for investors in Southeast Asia, offering liberal economic policies, a skilled workforce and a strategic location as the gateway to the greater Mekong region.
But analysts say years of political instability, including two military coups, have hampered the country's economic potential -- often referred to locally as the "lost decade".
Earlier this month the World Bank forecast that Thailand's GDP growth rate would slip from 2.5 percent in 2015 to just 2 percent this year, by far the gloomiest regional prediction.
Nearby Vietnam, on the other hand, reported a record number of foreign investment in 2015 and the fastest growth rate in five years at 6.68 percent.