finance. in fact, if anything, a high pace of credit growth may have raised risks of overheating in some sectors, with potential implications for financial stability. the monetary policy committee ( mpc ) has flagged this risk several times since last year, and will continue to monitor the situation closely. on the other hand, there remains an important drag to growth, largely stemming from a protracted global recovery. in some parts of asia, the first quarter growth has turned out to be lower than expected, as a result of slowing global trade. in thailand, q1 growth has similarly been subdued, expanding 5. 3 percent as both private consumption and investment moderated. part of this pullback may have been a natural reversion to a lower pace of growth after an unusually strong expansion last year. lingering uncertainty about global demand bis central bankers ’ speeches may have also caused some export firms to delay planned investment. consumption may have been held back by farm income in the midst of low global commodity prices, and an accumulation of household debt, which is now at 78 percent of gdp. set against this weaker - than - expected domestic demand, is relatively resilient exports which expanded more than 8 percent. given the still weak global demand on the one hand, and already easy financial conditions on the other, monetary policy must carefully weigh the merits of providing growth support against financial stability concerns. policy interest rate is not the only available tool to address these multiple objectives. macroprudential measures, in particular, are also part of the policy tool kit. the mpc will continue to exercise its best collective judgement as to what course of action and policy mix are deemed most appropriate to ensure maximum sustainable growth for the thai economy. challenges from capital flows and exchange rate volatility let me now turn my discussion to a topic that has attracted a lot of attention recently, namely the issue of capital flows and exchange rate. the appreciation of the thai baht this year up to late april has raised some concerns. during this period, the baht strengthened nearly 7 percent against the us dollar, and 10 percent against our trading partners ’ currencies. what has caused such movement in thai baht? there is little disagreement that, over a long period of time, exchange rates tend to appreciate in economies with better growth prospects, strong external balances and overall sound fundamentals. over the past decade, currencies in thailand and other parts of asia have followed gradual appreciation trends, broadly consistent with their respective

/ 2012 / 05 / asean _ stats _ leaflet2016 _ web. pdf 4 asean investment report 2015 ; infrastructure investment and connectivity, asean secretariat and unctad ( page 65 ) http : / / asean. org / storage / 2016 / 09 / asean - investment - report - 2015. pdf in addition, potential growth is hampered by ageing population and large debt overhang. according to united nations ’ world population ageing report5, the number of people aged 60 years or over is projected to increase by 56 % by 2030. on top of that, debt overhang has undermined private investment and consumption. these conditions could dampen demand and threaten long - term economic growth. along with these challenges, movements towards protectionism and geo - political uncertainties could trigger adverse shocks to the global economy. against this backdrop, we also face profound changes in technology. while technology advancement is needed to improve productivity and our standard of living, its unprecedented speed of change could be disruptive for incumbents in many industries ranging from taxi services to financial services. in the area of exchanges, we see changes in exchange and brokerage business models, the emergence of algorithmic trading, alternative trading, and robo - advisor. distributed ledger technology ( dlt ) could potentially transform payment, settlement and custodial services. we should be mindful that technology advancements also bring along new forms of risks to the financial system ranging from cyber risks to strategic risks of existing business models. ladies and gentlemen, these circumstances pose challenges not only for regulators but also players in the financial market. to ensure that our financial system serves our economy and society well in the vuca world, i believe that there are three imperatives we must focus on. these are ( 1 ) productivity, ( 2 ) immunity, and ( 3 ) inclusivity. allow me to highlight some initiatives that have been implemented to advance these objectives in thailand. first, on the productivity front, we are committed to supporting the use of technology for greater productivity. digitization will help enhance efficiency in financial services. there has been remarkable progress in the electronic payment ecosystem. for instance, our promptpay, which was launched early this year, is among the most efficient faster payment systems in the region. last week, we launched the standardised qr code for payment services. this was the world - first collaboration from the five major global credit card service providers. these payment platforms and standards will improve convenience and efficiency, and provide foundation for