road. at this juncture, it is important that we do not turn the corner to complacency but rather face the challenge of how to sustain or even raise growth slightly without creating problems in the long run. i have three challenges for us to think about. first, the government has emphasized the importance of balancing between external reliance and domestic strength in order to mitigate the problem of over - dependence on the possibly volatile external demand. the government ’ s dual track policy aims to maintain global links between thailand and her external markets while also creating a strong and broad - based domestic demand especially at the grass - roots level. the merit of programs that reach out to the grass roots like the village fund and the people ’ s bank is to help relax some of the financial constraints on low - income families which have had limited access to formal financial services. on the upside, more opportunities are being granted to the underprivileged, with long - term benefits hopefully realized in the form of greater ability to earn and consume. however, overdoing some of these programs may induce households to assume too much risk and accumulate debt beyond their ability to service. that will eventually give rise to loan defaults and a burden on the government ’ s budget. at present, thailand ’ s household debt is still considered low compared to other emerging countries. at the end of 2002, the ratio of thailand ’ s household debt to gdp is only 27 percent, significantly lower than the ratios observed in other asian economies. moreover, this debt accumulation has taken place along with a steady increase in household income and asset, thus mitigating the risk of excessive debt burden. while the debt issue does not look to be serious for now, a build - up of household debt stock could imply that private consumption would likely to become more sensitive to interest rate changes. this would have a direct implication on monetary policy because even a small change in the policy rate could now have a large impact on gdp when households are highly leveraged. it is therefore prudent for us to monitor household debt closely and ensure that the rise in household leverage is manageable. the second challenge is posed by the slow recovery of commercial bank credits. despite some positive development, it is clear that credit expansion has not kept up with economic growth, and the intermediary process between depositors and investors is still clogged up. while it is true that many companies can now resort to other means of financing such as issuing debentures or drawing from

our economic projections. looking back the past few years, the recovery of the thai economy had been largely driven by improvements on the external front from the recovery of global demand. growth drivers were unbalanced ; exports of goods and services acted as the main drivers of growth while domestic sectors were well - below historical average. last year marked a turning point as growth became more balanced. private consumption strengthened, supported by improvements in employment in major sectors as well as government measures to support low income groups, such as the state welfare card project. in addition, private investment expanded with increased investments in machinery and equipment along with greater construction activities as the overall growth became more broad - based. we have seen markedly increasing interest from foreign investors, especially in the eec area. consequently, in 2018 the thai economy expanded on a solid footing, with growth of 4. 8 percent in the first half, before moderating in the second half due to slowing global demand. this weaker global demand was largely a result of slower economic growth in a number of major trading partners ; a number of country - specific transitory factors ; and uncertainties surrounding trade tensions between the us and china. nevertheless, thanks to more balanced growth engines, the thai economy grew 4. 1 percent in 2018, an improvement from 4. 0 percent growth in 2017. it was also the first time in a decade that the thai economy registered consecutive annual growth of 4 percent. looking ahead, the thai economy is projected to continue to expand around its potential, with growth this year will slightly moderate to 3. 8 percent as slower growth of major trading partners weighs on the export sector. domestic demand would remain the key growth driver, as 2 / 9 private consumption continues to be supported by government welfare measures and underpinning factors, such as employment and consumer confidence, remain strong. furthermore, private investment is expected to continue to improve, aided by more investments in the eec area, further progress in the public - private partnership infrastructure projects, and relocation of production bases to thailand in industries such as electronics, automotive parts, and rubber. meanwhile, the tourism sector is expected to continue to expand mainly due to improved confidence and return of chinese tourists. it is expected that the number of foreign tourists will exceed 40 million this year. ladies and gentlemen, although our outlook indicates a sustained growth, a number of risk factors remain. these include ( 1 ) the potential impacts from us protectionist policies and trade tensions with china, which so far have had mixed effects on the thai