The current account surplus is expected to top 6 per cent of GDP this year, amounting to more than 26 billion USD. Public debt stays rather stable at around 43 per cent of GDP. Our international reserves stand at almost 3 times of short-term debt, among the highest in the region. The non-resident security holdings in our bond market is lower than 10 per cent, while those in the Stock Exchange of Thailand account for around 30 per cent of market capitalization. Such relatively low levels of non-resident participation, compared to our peers, suggest limited exposure to future capital flight. Corporate sector’s foreign debt also accounts for just 13 per cent of total corporate debt as of mid-2015. Moreover, most external debt is concentrated among large corporations. These large firms tend to manage their exchange rate exposure well, by utilizing financial hedging instruments. Careful risk management practice among Thai corporates and financial institutions has made them much more resilient to volatile movements of the exchange rate. The Thai banking system is also resilient, with a high level of capital buffer and stable loan growth, despite some deterioration in loan quality. Banks have closely monitored their customers, and have maintained a high level of loan loss provision as a buffer for bad loans. They are also well capitalized, with the capital adequacy ratio at 17.3 per cent and Tier1 ratio at 14.4 per cent, among the highest in Asia. This suggests that our banking system has sufficient capital to shoulder unexpected loss, and accommodate credit expansion.

In terms of quarterly performance, a significant rebound is expected over the summer in line with the removal of the most severe lockdown measures. However, the scenarios differ in terms of the duration and severity of virus-related restrictions on economic activity and the behaviour of households and firms in the rest of 2020 and throughout 2021. In all scenarios, a deep recession is envisaged: in the severe scenario, real GDP would fall by 12 percent in 2020. Chart 1 Euro area real GDP under the mild, medium and severe scenarios  https://www.ecb.europa.eu/press/key/date/2020/html/ecb.sp200519~e5203d3520.en.html  1/14  5/19/2020  Pandemic central banking: the monetary stance, market stabilisation and liquidity  (index, 2019 Q4 = 100)  Source: ECB calculations. Note: For details on the scenarios, see Battistini, N. and Stoevsky, G (2020), “Alternative scenarios for the impact of the COVID-19 pandemic on economic activity in the euro area”, Economic Bulletin, Issue 3, European Central Bank. Chart 2 shows the household savings rate, as projected in the European Commission Spring Forecast that was published a couple of weeks ago. The household savings rate is forecast to jump by a remarkable 6 percentage points to around 19 percent for 2020, and is expected to remain elevated even in 2021. Although “forced saving” during the lockdown is surely contributing to the increase in household saving, it is plausible that the precautionary motive will remain significant so long as virus-related uncertainty persists. Elevated uncertainty may also hamper investment prospects for an extended period of time.