Government spending sustained growth momentum in September and the third quarter, while private consumption and investment recovered.

Bank of Thailand (BOT) data showed the Business Sentiment Index continued to rise over the past three months, reaching 51.5 points in September.

The central bank also said the Kingdom's current-account surplus of Bt1.2 billion for September was the highest in 21 months.

Moreover, Finance Ministry spokesman Somchai Sujjapongse yesterday announced public spending in September was up 23 per cent on year and 13 per cent, or Bt360 billion, during the third quarter. He said strong exports had also aided economic growth.

Government spending is likely to increase more if the 2007 fiscal budget is implemented faster than expected. The 2007 budget of Bt1.52 trillion, which is predicted to be Bt100 billion in deficit, should be disbursed by the end of January.

Revenues rose 9.5 per cent on year to Bt78.1 billion in September and 0.7 per cent on year to Bt353.6 billion in the third quarter.

The number of tourists entering Thailand last month rose 6.8 per cent on year to 972,000 visitors.

The improved consumer and private-investor confidence witnessed in the third quarter came about despite the Sept 19 coup, terrorist explosions in Hat Yai and flooding in the central and northern regions. But the situation was aided by a decline in oil prices.

BOT data showed the Consumer Confidence Index for September also improved, reaching 82.1 points, due to confidence in the economy, increased employment and better prospects for future income as a result of diminishing retail prices and the changed political situation.

The Private Investment Index rose 1.6 per cent on year in the third quarter, up from 0.4-per-cent growth recorded in the second quarter. The Private Consumption Index, meanwhile, posted 2 per cent growth for the third quarter, up from 0.8 per cent in the previous quarter.

Suchada Kirakul, the BOT's assistant governor-designate, said the rising private consumption was a result of falling oil prices, which bolstered purchasing power. She said sustainable interest rates also encouraged the purchase of houses and cars.

"Consumer confidence picked up after the coup. Investment remained low, because of the flooding, but is expected to increase in the future," she said.

Exports, however, which grew 16 per cent in the third quarter, are likely to fall for the rest of 2006.Suchada said this would slightly reduce economic growth figures for the second half.

Second-half economic growth has been forecast at 4.5 per cent, with annual growth likely to be 4.5-5 per cent. Growth of 5.5 percent was recorded in the first half.

The Kingdom's current account improved significantly, with a surplus of US$2.8 billion (Bt103 billion) in the first nine months of the year, thanks to a service and transfer account surplus of $3.3 billion despite a trade deficit of $400 million.

The BOT predicts the current-account surplus for the year will be between $1.5 billion and $3.5 billion.

Wichit Chaitrong,

Anoma Srisukkasem

The Nation