Consumer spending last month was solid, with car sales jumping 27.2 per cent year on year, said Soraphol Tulayasathien, director of the economic stability analysis division at the ministry’s Fiscal Policy Office.

Registrations of new motorcycles increased 3.9 per cent, the first monthly rise after seven months of declines. This is seen as a sign that the incomes of the poorer segments in society are rising in line with the economic recovery, Soraphol said. Previously, the consensus was that the benefits from the economic recovery had not yet reached the poor.

Last month, the real incomes of farmers rose 3.4 per cent, extending gains to a seventh straight month, as agricultural production increased and rice prices went up, Soraphol said. In contrast, prices for other farm products, such as rubber sheets and sucarcane, remain low.

Farmers’ incomes showed signs of strength in part due to natural disasters hitting the agricultural output of trading rivals. Thailand has gained from the absence of severe weather events this year, Soraphol said.

Private investment also showed indications of expansion after sales of commercial vehicles rose 28.1 per cent year on year and those for one-tonne pickup trucks increased 23.7 per cent. Sales of cement went up 7.3 per cent and tax revenue derived from property transactions increased 23.3 per cent.

Exports expanded 6.7 per cent last month, with shipments coming in at US$22.8 billion, against imports of US$23.4 billion. The strong export performance suggests continued external demand for Thai-made products and the trade deficit indicates rising private investment, Soraphol said.

For tourism, the number of arrivals in August expanded 3 per cent to 3.23 million, with rising inflows from Malaysia, Hong Kong, Japan, India and Vietnam. The number of Chinese visitors dropped. Revenue from tourism spending was Bt168 billion, up 2.8 per cent year on year.

The Finance Ministry is still optimistic about economic outlook, despite the US Federal Reserve raising its policy rate again, to 2.25 per cent, and the concerns over the trade disputes between the United States and China.

“The market had priced in the US rate hike and impact of the trade disputes is limited. We still believe economic growth will be 4.5 per cent this year,” said Soraphol.

He said that Thailand and Vietnam are rivals as destinations for foreign direct investment as investors may shift part of their production capabilities out of China to avoid the impact of trade war.

The baht remains stable as the country has low foreign debt, serving as an additional draw for foreign investors, Soraphol said. By comparison, the Indonesia rupiah has suffered from capital outflows, he said.

“We have met many foreign investors who are looking to make new investments in Thailand or Vietnam,” he said.