the economies of scale and network effects in several sectors put new firms that produce at higher costs at a disadvantage. you must be very optimistic and have a great deal of confidence in your business model to launch a retail business these days, when giants like walmart and amazon are making life difficult for established companies. for example, with its diverse network of producers, walmart can change its source of supply to minimize operating costs a lot more easily than a newly launched company can. 14 however, the effects of concentration and declining entry rates on innovation and productivity are not unequivocal. many large companies use leading - edge technology and are pushing boundaries as never before — such as the firms developing self - driving cars. today, large companies know that they must continually invent new products or services to stay one step ahead of their competitors. a good example of this is apple, with the introduction of its iphone in 2007 and the different versions the company has introduced since then. dynamism and potential growth competition is therefore essential to innovation and can certainly come from established companies. but the possibility of new companies revolutionizing an industry encourages established firms to innovate. viewed in this light, the loss of dynamism could be symptomatic of a decline in innovation and long - term productivity, paradoxically during a period when technological advances seem to be increasing exponentially. indeed, this question may warrant further investigation so that we better understand which new firms are most likely to contribute to growth. statistics show that the shelf - life of new companies ranges between two extremes. about half of firms close their doors within five years of their creation. but younger companies that do make a name for themselves tend to grow very rapidly. it is this propensity to grow by leaps and bounds that inspired the term “ gazelle. ” 11 g. grullon, y. larkin and r. michaely, “ are u. s. industries becoming more concentrated? ” 2016. 12 j. de loecker and j. eeckhout, “ the rise of market power and the macroeconomic implications, ” national bureau of economic research working paper no. 23687, 2017. 13 m. duhamel and s. crepeau, “ competition intensity in canada : a critique of recent oecd findings, ” industry canada working paper no. 2008 - 09. 14 research has shown, for example, that large importing firms have a higher elasticity of substitution across products in canada

to domestic demand recovery. repayment of overdue debt to farmers, approvals of backlog projects by the boi, and fresh loans to the smes provided quick relief in and of themselves, but the combined multiplier effects could also be meaningful. by shoring up income and improving overall sentiments, these measures constitute an important effort to revive private spending. fast indicators already suggest that private consumption and investment are stabilizing, and private confidence improving. we expect the recovery of domestic demand to gain more traction going forward, especially in the second half of this year. in light of these recent events, our latest growth projection for this year has been revised upward to 1. 5 percent. while this figure may be much lower than long - term potential growth of around 4 to 5 percent, it is chiefly dragged down by the first - quarter contraction – bygones if you like. from this quarter onwards, we anticipate a clear pickup in growth and a v - shaped recovery. many independent forecasters are currently holding a similar view, and most have revised up their growth projections after the political turning point in may. bis central bankers ’ speeches this brighter economic outlook is not without risks, however. exports of goods in particular have underperformed thus far this year, despite their insulation from domestic political turmoil. a number of factors are at play, some temporary, others more secular. weaker economic growth in regional trading partners, including china and asean, has been one cyclical hindrance. global trade also appears to be lagging global growth, limiting scope for emerging economies like thailand to leverage on advanced economies ’ recovery. more deep - rooted structural issues at home may also be responsible, as segments of the manufacturing sector are not integrated into the modern global supply chain. for these reasons, exports may play a less active role in its contribution to growth this year. on the financial stability front, we remain cautious but optimistic. domestically, the prolonged period of economic slowdown has subjected indebted households and smaller businesses to financial strains. loan quality for weaker borrowers has deteriorated somewhat as a result. the good news is that these risks have been confined to specific sectors, and the banking system remains strong and has weathered the slowdown very well, owing to their prudent risk management policies. externally, we also cannot rule out further episodes of volatile capital flows owing to shifts in monetary policy abroad. our economy has proven resilient to such shocks in the recent past, thanks to strong macro