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Asian spenders are now crowding the region's department stores to buy gifts before the holiday break. Pictures of shoppers in China, India and South Korea illustrate a rise in consumer confidence, driven by the economic data coming out of those countries. Economists and pundits are predicting the rise of household spending in Asia will drive the region through the economic crisis, with strong consumer sentiment set to continue into the Year of the Tiger.

Thai consumers have been out in shopping districts, carrying full shopping bags a week ahead of the Christmas and New Year festivities. But the mood in Thailand is somewhat dampened by the ongoing political situation and the uncertainty surrounding the Map Ta Phut ruling. Thai consumers are cautiously using their money during this holiday season, even though many retailers are offering big discounts to promote sales during the season.

Improved consumer sentiment is an essential element in pushing the economic recovery into gear. But the political situation and the Map Ta Phut case have affected big investment projects in spite of initial expectations that renewed investment confidence will drive the economy next year. Commercial banks are closely monitoring loan approvals and big investors are likely to wait and see how the overall situation develops. At present, potential investors are those in small- and medium-sized businesses.

This is the challenge that the government's economic team will have to tackle in the New Year. It remains to be seen to what extent the government's stimulus package will have a carry-on effect to boost consumer confidence even further.

However, the upside for Thailand is that the economy is ever more closely linked with the rising Asian economies like China and India, which are enjoying rapid growth rates.

After their orders dried up earlier this year, many Chinese factories and industrial plants are now resuming production, with a series of new orders, especially from the US. Indian car companies have also seen a rise in orders, thanks to the government's economic stimulus package, pushing up car sales in India in the fourth quarter of this year.

Thai economic growth, however, badly contracted in the first quarter, by 7.1 per cent. Nonetheless, the recent economic indicators have shown a gradual recovery. The economy contracted by 4.9 per cent in the second quarter and 2.8 per cent in the third quarter, according to figures from the National Economic and Social Development Board. The economic growth figure is set to rise for the first time in the fourth quarter - if consumer confidence continues to rise.

Economists and commentators now hope that the next instalment of the stimulus package will boost the enthusiasm of consumers in the coming months. Meanwhile, the Map Ta Phut ruling should send a benchmark warning to the authorities to oversee industrial companies by laying acceptable ground rules to avoid conflict between industrialists and local communities in the future.

Most importantly, we are all hoping that the political situation will be resolved sooner rather than later, so that the country can move on in the Year of the Tiger.

All of these factors are dependent on Thais. The challenging question is whether Thais can demonstrate an ability to resolve their differences constructively - for the sake of the country.

Until that happens, Thai consumers are unlikely to loosen their purse strings too much.