The extension, if granted, will be the year's second. The Cabinet earlier agreed to push back the deadline for binding obligations from June to August.

"The ministry agreed at a meeting to extend the binding budget obligations of government agencies and state enterprises until the end of September. This will cover transactions involving procurements, the central budget, and expenditures. The extension will be proposed to the Cabinet in the last week of this month," Varathep Ratanakorn, caretaker deputy finance minister, said yesterday.

Several government projects, worth a combined Bt52.08 billion, will not be able to meet their binding budget obligations by the end of August. Most of these projects involve procurement.

The extension is aimed at boosting government expenditures to 93 per cent of the total budget and to prevent any damage to state agencies. It will also inject more money into the economy before the 2007 fiscal budget takes effect.

Government spending for the period running from October 2005 to August 11, 2006 was accounted at Bt1.06 trillion, or 78.19 per cent of government's budget of Bt1.36 trillion. During this period, the government invested Bt220.73 billion, or 62.48 per cent of its Bt353.28-billion investment budget. That amount is Bt38.33 billion higher, or 0.66 per cent, than the last fiscal year.

Suchada Kirakul, senior director of the Bank of Thailand, said yesterday that if the general election were pushed back a month from its original October 15 date, it would still fall within the central bank's expectations.

The bank had earlier forecast that disbursement of the 2007 fiscal budget would be delayed by nine months, she said.

Earlier, Bank of Thailand Governor MR Pridiyathorn Devakula predicted that government spending would boost economic growth in the second half.

Pridiyathorn said spending of funds from the 2006 fiscal budget would accelerate in the third quarter. He said carried-over funds from the fiscal 2006 budget would be disbursed in the fourth quarter, contributing to growth.

As a result, government spending in the second half of the year is expected to grow 5 per cent-6 per cent in real terms, or 11.4 per cent in monetary terms.