Within ASEAN: Cambodia, Laos, Myanmar, Vietnam and Thailand, or the CLMVT subregion, is going through substantial infrastructure transformation and connectivity enhancement. These public infrastructure investments will certainly crowd in private investments, catalyzing further growth and development. The strategic location of Thailand and the tremendous demand for financing in ASEAN, especially the CLMVT sub-region, present large opportunities for our capital market for a number of reasons. Thailand has strong trade relations and large-scale direct investments in ASEAN countries. Thailand’s capital market infrastructure is ready to facilitate regional investment and growth prospects. Our capital market serves as a promising connector for global investors and regional financing demands. Ladies and Gentlemen, With all these promising prospects, however, Thailand, ASEAN, and the rest of the world face common challenges. We are going through a challenging time in the global economy and geo-political environment. In the current stage of gradual economic recovery, policy uncertainties, excess global liquidity, and technology disruption will all contribute to an increasingly volatile, uncertain, complex, and ambiguous environment, or the VUCA world in short. Let me elaborate on some of the challenges we are facing. The global economy has observed prolonged periods of low-growth and low-yield conditions. The unconventional monetary policy measures undertaken to stimulate economic recovery in advanced economies resulted in huge excess global liquidity that has spilled over to other economies. The growing search-for-yield behaviour induce under-pricing of risks and volatilities in the global financial system, which could lead to financial fragility in the long term.

These developments took place against the background of the normalisation of financial conditions. Contributing to this process were the domestic reforms applied and the ECB’s monetary policy measures, together with progress in EMU governance arrangements. In the case of monetary policy, the ECB’s deployment of a raft of non-standard measures favourably impacted financing conditions, reducing financial fragmentation in the euro area and prompting a pick-up in bank lending. In turn, on the back of expectations of a recovery in the US economy, the euro area monetary policy enabled a substantial depreciation of the euro in the first half of 2015, which helped European – and Spanish – exporters to increase their relative weight in international markets. Adding to these factors underpinning the recovery in activity and employment were the marked decline in oil prices and fiscal policy, which joined monetary policy in its expansionary stance, in contrast to its restrictiveness in previous years. Our recovery can hardly continue to be based, to the same extent as in 2015, on these expansionary factors. The mix of stimuli, both from demand-side policies (monetary policy and fiscal policy) and from the fall in oil prices since 2014, is going to have less of an impact on growth. Fiscal policy will have to be restrictive again until the process of fiscal consolidation is complete. And, as to the exchange rate of the euro, the most prudent assumption would be that it will not be a significant additional stimulus but rather approximately neutral, at least during 2016.