The Thai economy passed through a tough situation in March, beleaguered by internal and external negative factors, but most economic indicators showed better-than-expected figures, according to the Bank of Thailand (BOT).

The country's exports, private consumption, tourism and government spending in March continued to rise. But private investment rose slowly due to skyrocketing oil prices and dampened business sentiment.

"The economic picture showed better-than-expected good signs following serious concern about the situation," said Suchada Kirakul, BOT senior director of the Monetary Policy Group.

Aside from three straight months of retail price hikes along with rising crude oil prices, the street rallies of anti-Thaksin protesters were earlier expected to be a significant factor, causing loss of business and consumer confidence and stalling economic growth.

The economic figures in March, however, relieved these concerns to a certain degree, although the BOT has just revised the economic growth rate downward by 0.5 percentage points to between 4.25 per cent and 5.25 per cent this year.

The central bank called for investors to seize the current good opportunities afforded by the low real interest rates, the stronger baht and the deferral of the government's mega-infrastructure projects.

"While the government has postponed the investment, the private sector should be able to take advantage of cheap resources. Investors can import goods more cheaply due to the baht appreciation. It is an opportunity for long-term investment," said the senior director.

More than one million tourists arrived in Thailand in March, for growth of 13.4 per cent over the same month last year. Suchada said the figure illustrated that the tourism industry did not feel the pinch from political turbulence.

Services and transfer accounts were in a surplus of US$300 million (Bt11.3 billion) in March and $1.9 billion in the first quarter of the year. Meanwhile, the Private Consumption Index (PCI) increased moderately by 3.6 per cent from March last year, compared with a contraction of 1 per cent in the previous month. The index rose by 1.2 per cent in the first quarter of the year.

Passenger car sales in March rose sharply by 24.2 per cent year-on-year, compared with 1.9-per-cent growth in the previous month. Imported consumer goods rose by 8.3 per cent, against a 6.1-per-cent increase in February. Motorcycle sales turned up by 8.2 per cent following a 6.8-per-cent contraction in February.

Export value was recorded at $10.9 billion, up 16.2 per cent from the same period last year, while import value increased slightly by 2 per cent to $10.7 billion.

The trade account turned

back to a surplus of $187 million

for the first time in six months,

while the current-account surplus was recorded at $485 million in March.

In the first three months of the year, the trade deficit was $224 million, lower than the deficit in the first quarter last year of $3.1 billion. The current-account surplus amounted to $1.66 billion, compared with a deficit of $1.41 billion in the first quarter of last year.

The Private Investment Index in March rose by 1.4 per cent, lower than the 5.3-per-cent growth in February due to the base effect, Suchada said. She said higher oil prices led to sluggish business sentiment, while fierce competition had also worsened the investment climate.

She said the economy needed investment, as capacity utilisation in the month was recorded at

the relatively high level of 79.8 per cent.

The Business Sentiment Index has continuously been below the 50 threshold for the last straight 23 months. It was recorded at 44.8 in March, compared with 45 per cent in February.

Anoma Srisukkasem

The Nation