geared towards temporarily addressing risks to growth. in the context of a sharp contraction in economic bis central bankers ’ speeches activity from the floods, moderating inflationary risks, and pronounced headwinds from the global economy, the mpc judged this to be most appropriate. such policy actions have helped to shore up confidence and hasten the recovery process. however, with clearer signs of a pickup in economic activity and the recent rise in global oil prices, upside risks to inflation has become more elevated. it is unlikely though that inflation would accelerate to the extent that would threaten economic stability. nonetheless, monetary policy will remain watchful as the pick - up in public and private spending and cost - side pressure stemming from various government stimulus packages may add extra inflationary pressure in the period ahead. from a longer - term perspective, let me reiterate our commitment to the inflation targeting framework. since its adoption over 10 years ago, this framework has endowed monetary policy with a degree of flexibility and credibility that has proved extremely valuable. especially through trying times with high levels of uncertainty, the framework has imparted a degree of stability by helping to anchor public expectations of monetary policy. in delivering our primary mandate of macroeconomic stability, inflation targeting will continue to be a central pillar. at a more structural level, the bot can also act as a catalyst to help enhance competitiveness and augment economic adaptability. one key avenue is through fostering financial sector development. here, the main thrust of our policy focus will be to enhance the effectiveness of the financial sector in serving as intermediaries of capital through further liberalization. the aim is to achieve improvements in four key dimensions. they are : ( 1 ) greater financial innovation and expansion of available financial instruments ; ( 2 ) broader choice of services to suit households and firms ’ needs ; ( 3 ) lower costs of such services ; and ( 4 ) improvement in financial access. starting with the banking sector, which plays the most prominent role in our financial system, we will be taking steps to enhance competition. in the spirit of progressive liberalization under the asean economic community ( aec ), thailand ’ s formula for the banking sector will be guided by the second financial sector master plan. this year, we enter the second phase of this plan, which would allow existing foreign bank branches and subsidiaries up to a maximum of 20 branches and 20 off - premise atms. new service providers may be allowed under a restricted license to close any remaining gaps in the system. in the

4. 9 percent in 2012 ( figure from mpc january meeting ), boosted mainly by post - flood spending of both the private and public sectors. in 2013, momentum is expected to pick up, resulting in an expansion of 5. 6 percent. this optimistic outlook reflects key fundamental strengths in thailand ’ s economy. first, thailand ’ s human capital remains intact and strong, ready to support business expansion. second, the corporate sector continues to enjoy healthy balance sheets from accumulated savings and profits. this strong financial position will enable future investment and restoration. third, thailand ’ s financial sector is well positioned to provide the financing necessary to facilitate the investment cycle. although the new financial institutions development fund ( fidf ) fee will detract from banks ’ bottom line, the impact should be marginal and manageable. finally, thailand is well positioned geographically to serve as a supply - chain hub for many industries, and stands to gain from the expanding set of opportunities created by a growing and more integrated asian economy. thailand ’ s underlying strength places us in a position to reap the substantial benefits from such regional expansion and integration. however, realizing these benefits will be a challenge and requires considerable adjustments. the key task is to ensure the necessary structural reforms to enhance thailand ’ s international competitiveness. factors of production will need to be relocated from sunset to sunrise sectors. the quality of our human capital should be continuously strengthened to handle broadened and more complex activities as well as competition. logistics and basic infrastructure need to be upgraded to support increased flows of goods and services. government policies, rules, regulations and the legal framework must be improved and updated to facilitate all of this. in a world with so much uncertainty, what is certain is that we cannot simply make - do with the status quo. lifting our growth potential requires vigorous change and transformation in what we do and how we do it. ladies and gentlemen, as the familiar french proverb – “ rome was not built in a day ” goes ; these structural challenges cannot possibly be addressed in the short - term. successful implementation of this reform agenda requires a medium - to long - term perspective. the public sector will play a critical role in this. this brings me to the final part of my address, the bot ’ s policy focus going forward. starting with monetary policy, the primary aim at the current juncture is to strike the right balance between accommodating domestic recovery while ensuring stability in the long - term. as mentioned earlier, recent monetary policy actions were