economic growth. the thai economy this year will continue to be driven largely by domestic demand and tourism. exports will likely remain flat or decline further, not only due to subdued global demand but also price effects as export prices have tumbled following the low commodity prices. but, so far the impact on the labor market, even those in export - oriented sectors, has appeared well - contained. notwithstanding the threatening uncertainty around us, tourism continued to be a main growth driver for the thai economy, with expected tourist arrivals of around 31 millions in 2016. the clmv market is another bright spot. the thai exports to clmv market are expanding in accordance with their growing middle class and vibrant economic activities. the clmv market is now accounting for 10. 4 percent of thai total exports, which is already larger than our exports to japan, the third largest export destination. in terms of the domestic economy, we have learned from the latest gdp release that the construction sector has picked up with a strong growth of more than 20 percent in the fourth quarter of last year, thanks to government infrastructure projects. the spillovers from these projects are also benefiting the real estate market. demand for properties continues to expand as we see mortgage loans growing at around 10 percent year on year in recent months. financing conditions have also been favorable. monetary policy stance remains accommodative and in full support of economic recovery. and, despite the slow economic growth, the overall credit and corporate bond issuance to the private sector continues to grow at around 7 percent. the bank of thailand would ensure that the cost of funds is conducive to the ongoing recovery, while also keeping a cautious eye on risks to financial stability. on the fiscal front, the government has become more effective in disbursing and implementing investment projects. government relief and stimulus measures are also essential at difficult times, especially for those severely affected by adverse economic situations, such as from the current drought. but while taking care of the short - term issues, we must not forget to reckon longer term challenges facing the thai economy. thailand is in need of serious initiatives to upgrade and unlock our economic potential in the long term. in this context, we welcome many new initiatives by the government to push ahead with structural reforms. this brings me to the last part of my talk tonight on the way forward for the thai economy, and how we and our partners like japanese businesses may ride together toward sustainable prosperity. let me first touch upon some of the ongoing reforms

economies may also have important implications for cross - border capital flows, and financial market volatility, particularly exchange rate. the unstable differentials caused by rocky recovery paces, can give rise to large and volatile capital flows, which may have a tendency to be short - term and foot - loose. and fourth, uncertainty regarding global regulatory reform. in the immediate aftermath of the crisis, it is natural to observe the growing sentiment towards re - regulation, coupled with nationalisation of problem banks, the trend towards re - regulation has picked up momentum. therefore, it is important to ensure that we do not swing from unquestioned faith in the market to unquestioned faith in the regulation. a balanced approach is needed. just as market failures cause inefficiencies and instability, regulations too can be a two - edge sword, it could correct market failures and distortions, or it can be the cause itself if not well designed. the task of such design to avoid regulatory gap and arbitrage is all the more difficult, given the shifting financial landscape, shifting regulatory landscape as countries embark on their own reform agenda at different speed. this is why a forum such as the bis is all the more critical. the key lesson that we should learn from this and past crises is that the financial system is always vulnerable to the unobserved and unmeasured. it is not that our tenet of risk - base supervision is flawed, but rather we overestimate our ability to understand and manage such risks. in response to the calls for strengthening of regulation, g20 leaders and finance ministers have committed to strengthening of regulation. the comprehensive regulatory reform package being proposed is aimed to address the key weaknesses such as excessive leverage, under capitalisation and underestimation of risk, weakness in standards of risk management for liquidity risk for complex products and markets, and macro - prudential measures. the range of policy proposals that have been supported by g20 leaders and finance ministers, the financial stability board, the basel committee on banking supervision, and international accounting standards setters, include calls for strengthening of micro - and macro - prudential regulations that aim at capturing risks of individual institutions and risk arising from interconnectedness of the financial system, as well as more robust governance framework. the shift in policy paradigm from this crisis has been the increasing recognition of the concept of macro - prudential policy in dealing with the problem of systemic risk posed by the interconnectedness within the financial system,