BANGKOK (REUTERS) - Thailand's capacity for economic growth should increase when a dual-track railways project is completed in around five years, a deputy prime minister said on Wednesday.
The project is part of the Thai government's wider plan to help boost a slowing economy by strengthening infrastructure and easing logistic costs.
The Southeast Asian nation's trade-dependent economy is stuttering amid slow demand for its exports. The economy grew only 0.9 per cent last year.
Thailand is currently heavily dependent on road transport, which accounts for about 75 per cent of logistics. Once improved rail and other infrastructure are in place, the economy could grow at an annual rate of 5 to 6 per cent, Deputy Prime Minister Pridiyathorn Devakula said at a seminar.
Last month the state planning agency cut its economic growth forecast by half a percentage point to 3.0-4.0 per cent for this year.
On Wednesday, Mr Pridiyathorn, who is in charge of economy, said growth of more than 3 per cent "should be achieved" this year.
"It wouldn't be so bad if we grow more than 3 per cent this year as we still have many factors supporting us," Mr Pridiyathorn said, citing public investment and private spending.
The dual-track railways will cover a total of 2,470 km, he said. Thailand currently has 357 km of dual-track rails.
"This government is working on turning our long-time weakness into our biggest strength by investing in infrastructure especially in railway system nationwide," Mr Pridiyathorn said.
He expects dual-track railway auctions and construction to start between August and March with the first 906 km, or over one-third of the project, to be completed by 2018.
Thailand has also recently signed agreements with China and Japan. Both are for rail projects that will cover a total distance of 1,447 km.
The Thai junta has targeted infrastructure spending as a long-term fix to some structural economic problems. The projects are also expected to stimulate private investment.