pre - covid = 84 % in q4 / 19 / peaked = 95. 5 % in q1 / 21 ) part iv : policy responses the most important agenda for thailand is longer - term structural reforms, dealing with increased investment to improve productivity and competitiveness. to do that, we need to sign more ftas to gain access to the new markets and streamline regulations to ease business burdens. for the bank of thailand ( bot ), our priority is to get the monetary and financial policy right by striking balance between growth, inflation, and financial stability. after covid, the bot raised the policy rate in gradual and measured fashion to 2. 5 %, which is the third lowest country besides switzerland and japan. looking ahead, to adjust the policy rate we also have to look beneath the headlines to ensure that the rate is appropriate for supporting long - term sustainable growth. in terms of credit condition, the credit mechanism is still working. total loan outstanding declined partly from debt repayments, while new loan has been expanding. however, credit allocation is uneven, especially for smes. shrinking credit to smes may reflect risk appetite of banks. the appropriate mechanism to address this problem is a more comprehensive credit guarantee scheme. 3 / 4 bis - central bankers'speeches in the longer term, the bot is laying the foundations for the future financial landscape, particularly digital and green economy to ensure sustainable growth. on digital front, we are issuing virtual bank licenses2, which is intended to encourage a new form of competition in the banking landscape. open data is a potential game changer in trying to increase competition. this policy aims to build a mechanism that allows consumers to exercise their rights to conveniently and securely transfer their data stored at one provider to another so that consumers can apply for and receive better services from any providers. on transition to green economy, we are setting the direction for financial sector to support economic transition towards environmental sustainability ( from brown to less brown ) such as financial products and services that would accommodate businesses, particularly smes, in making their environment - related transitions. 1 seasonally adjusted by bot 2 we expect the virtual bank to commence operation in 2026. 4 / 4 bis - central bankers'speeches

social science. one reason may be the firms ’ reluctance to adjust wage upwards, resulting in shortage of supply at the going wage. this reluctance, in turn, may be caused by low marginal productivity of labour, which is a consequence of subdued capital formation over the years, resulting in low capital - to - labour ratio. escaping this vicious cycle of low wage and labour shortage, involves an improvement in labour productivity via higher investment in physical capital. several strategies have been proposed. some argue that raising the minimum wage, despite its costs, can potentially promote investment and improves labour productivity. some prefer to provide direct fiscal incentives for firms to invest. others see public investment as holding the key. the jury is still out as to how successful these approaches will prove to be in catalyzing an investment up - cycle, and ultimately alleviating the labour market issue. fortunately, the currently conducive macroeconomic environment is already providing ample incentives for businesses to invest. financing costs are currently low. strong baht facilitates imports of capital goods. firms stand to gain more from aec integration if they carry out their planned investment in a timely manner. collective efforts by all will also generate positive externalities, and can go a long way in easing the labour shortage problem for all parties. bis central bankers ’ speeches one fundamental force that may exacerbate the labour shortage problem is the demographic change. slowly but inexorably, the thai society is aging, as the total fertility rate is consistently lower than the replacement rate. the number of people aged 65 and above will double in less than 10 years. as projected by nesdb, by 2030 the working - age population will fall from the current rate of 68 percent to just over 60 percent, making thailand ’ s old age dependency ratio slightly higher than the asian average. the government can help manage this demographic transition by speeding up the reform of immigration policy, and simplify registration procedure. the initiatives can also fit in with the broader agenda of asean integration, to leverage on regional resources and promote regional economic integration simultaneously. closing remarks let me close my remark by thanking all of you once again for your invaluable contributions to the thai economy. the bank of thailand will continue our work of ensuring a stable financial and economic environment, so that businesses can continue to thrive and individuals can enjoy better standards of living on a sustainable basis. i hope that thailand will continue to be a destination of choice for your investment, and a country of shared opportunity and prosperity