Against this backdrop, the Bank of Thailand has the duty not only to preserve and maintain economic and financial stability, but also to develop our financial system so that it can effectively unlock Thailand’s economic potential, uplift productivity, and bring about more inclusive growth for the future. Ladies and gentlemen, For the Bank of Thailand, maintaining economic and financial stability is a prerequisite for sustainable growth. Thus far, the Thai macroeconomic outlook remains favorable, with the economy expected to grow 4.4 percent this year, the highest since 2012. Additionally, 1/6  the Thai economy has adequate buffers to withstand any immediate challenges, with ample international reserves, covering 3.5 times our short-term external debts; low dependency on external borrowing; and current account surplus of around 8 – 9 percent of GDP1. Moreover, our banking sector is robust, with high capital adequacy ratio and stable domestic funding. In the first quarter of 2018, the capital adequacy ratio of the banking system averaged 18 percent, among the highest in the region. To further safeguard financial stability, additional micro and macro-prudential measures were introduced, such as the regulations on domestic systemically important banks (D-SIBs), along with more stringent regulations on credit cards and personal loans to tackle household debt challenges. Moreover, the Bank of Thailand recently revised regulations to enhance financial institutions’ corporate governance, with emphasis starting at the Board of Director’s level. Meanwhile, in collaboration with the Thai Bankers’ Association, we established a “debt clinic” to offer multi-creditor debt restructuring program for troubled individuals.

The Chinese economy, in particular, was in a sweet spot with rebounding growth and low inflation, with room for further public investment. Asian economies also performed well mainly due to strong domestic demand. Last year, the Thai economy grew robustly at a higher-than-expected rate of 6.4 percent. Even though the impact of the still weak global demand became more apparent in the latter half of the year, spillovers beyond merchandise exports and export-oriented manufacturing production were limited. Factors supporting domestic economy include private reconstruction investment after the flood, while domestic consumption was supported by favorable wage and employment condition as well as government stimulus measures. Inflation in 2012 remained low at 3 percent, while core inflation averaged at 2.1 percent which was well within the Bank of Thailand’s target range. This year we expect growth momentum for the Thai economy to continue, amidst remaining uncertainties in the global economy. The US has managed to avoid the socalled fiscal cliff, although uncertainties surrounding the sequestration process still remain. Structural reforms in the euro area continue slowly but on course. Japan also has an optimistic outlook, given a series of government stimulus measures to pull the country out of deflation. Improving outlook for the global economy should underpin a gradual recovery in export for Asian economies, including Thailand. We have forecasted the GDP growth this year at 4.9 percent. However, given a stronger than-expected GDP growth in 2012, this forecast is likely to be revised up for the next release in April.