The focus on strengthening the ability of consumers and businesses to use financial services confidently and effectively must therefore be an important part of any effort to promote financial inclusion, to make a real difference to people’s lives including the two billion adults globally, who still do not have access to financial services. The role of financial inclusion in supporting sustainable economic growth is particularly important now, given the global economic landscape where countries continue to search for an engine of balanced, sustainable and long-term growth. Financial inclusion provides low-income households with equal opportunities to save and invest securely, borrow for productive activities and buffer against unforeseen shocks. The utilisation of relevant financial services improves households’ income and empowers them to attain healthcare, education and social mobility, effectively reducing social and economic inequality. Research (IMF) has shown that countries with lower inequality tend to have higher and more durable growth. There is also evidence that access to credit spurs entrepreneurship and job creation, and improves the economic well-being of households. Inculcating financial capability and discipline so that all segments of society have the ability to make sound decisions regarding saving, use of credit, investment for education and retirement, and protection against adverse events is one fundamental way to raise financial well-being for all. Financial literacy becomes even more important for those who are financially less privileged. For households with limited resources, it becomes vital for them to manage the finances even more effectively to attain financial security and improve economic well-being.

2 As for the household sector, even though the level of debt had risen somewhat in the recent years, approximately 85% of GDP last year, the decelerating growth provides us a relief. The transparent and prudent macroeconomic policy frameworks, used for both fiscal and monetary policy, also command trust from investors and the public. For these reasons, the reputable credit agencies have still reaffirmed their positive assessment of the Thai economy. Indeed, the recent economic conditions have underscored the importance of preserving sound macroeconomic fundamentals in order to create resilience in the face of unexpected shocks. Domestically, the recent economic slowdown has put some small businesses and indebted households under financial strains. Loan quality has deteriorated somewhat, with NPL increasing slightly as a result, but these risks have been contained to specific sectors. The banking system and corporate sector remain strong and have coped with the slowdown well, owing to their improved risk management policies. Externally, like many emerging markets, Thailand faced a couple episodes of capital flow volatility in recent years. The economy, however, has withstood these challenges reasonably well. For instance, during the “Taper Tantrum” in May 2013 and our own political unrest towards the end of 2013, Thai baht had swung by more than 10 percent in a year, fluctuating from 30 baht per US dollar to 28 and back to close to 33 baht. Despite this volatility, market reactions (in terms of outflows) have been relatively dampened.