pongpen ruengvirayudh : the current economic situation and recent monetary policy developments opening remarks by ms pongpen ruengvirayudh, deputy governor for monetary stability of the bank of thailand, at the joint foreign chamber of commerce in thailand ( jfcct ), bangkok, 21 may 2014. * * * distinguished guests, ladies and gentlemen, 1. it is my pleasure to be back here at the joint foreign chambers of commerce ( jfcct ). first of all, i would like to thank jfcct for inviting me and would also like to thank all the members of jfcct for your continuing contribution to the economic development here in thailand. economic outlook 2. a great deal has changed both domestically and externally since i was here last year. with respect to domestic economy, the prolonged political stalemate has weighed considerably on confidence, exacerbating the already fragile economy. externally, the announcement of the us fed to scale down its quantitative easing program since may 2013 has led to turmoil in financial markets across emerging economies. today, i therefore would like to take this opportunity to share briefly with you my thoughts on the country ’ s economic outlook, the medium - term challenges we face and monetary policy of the bank of thailand. 3. when it comes to current economic assessment, the slowdown of the thai economy over the last year, in combination with uncertainty over the ongoing political conflict, is a growing concern for many. the nesdb two days ago announced that gdp growth in 1q14 contracted by 0. 6 % ( yoy ), compared to same period last year. signs of moderation were witnessed in various economic activities, such as consumption and investment, as well as in government spending, despite signs of a rise in some exports. as the political deadlock lingers, tourism has begun to feel the impact. in the last mpc meeting of april 23rd, the committee projected that the thai economy in will grow less in 2014 than the previously assessed at 2. 7 percent. this will be mainly due to the weaker - than - expected economic momentum in the first quarter of the year and the political impasse posing downside risks to domestic demand and tourism. however, the economy is expected to resume its normal growth in 2015. 4. notwithstanding the short - term headwinds, there are also causes for optimism. global economic activity has been firming up. growth has gathered momentum in the us, the euro area and japan. recent government ’ s

so that minority shareholders are better represented on the board. audit committees are now a requirement and many banks now have nomination and compensation committees to reduce the power of the major shareholders. most also have risk management committee or, at least, asset and liability management committee. to further increase transparency, commercial banks now have to announce at the end of each month their npl level, penalties and fines imposed by the authorities, as well as the amount of their related lending. by year - end, we will launch the director's handbook for the financial community and further encouraging increased transparency of appointment and compensations. of course, we cannot change others without changing ourselves at the bank of thailand. our reorganization strategy focuses on four aspects, namely organizational structure and work process, human resource management, decision - making process, and database and information technology. our hierarchical structure has now been reduced from a total of seven layers to four. authorities and responsibilities are being further delegated toward a lower level to the operating officers in charge. this helps reduce the previously lengthy approval process and increase our flexibility. new departments have been established to better cope with the rapidly changing economy and the rising information need of the organization. these include the data management group, the information and public relation group, the planning group who conducts a bank - wide risk assessment as well as a new department of risk management and information technology examination, who monitor risk profile and risk management at the financial institutions. in addition, our business processes are now more client - oriented with a new website, new voice - mail, and new central point of contacts being offered as services to our stakeholders. both the netherlands and thailand are small open economies in the world market. to survive the tide of globalization, we both need a well thought out strategies. we have to choose our battleground and cooperate with friends around the world. to do this, local strength has to be further strengthened while lessons and technologies must be learnt from others. here, international co - operations through jointed ventures, through foreign direct investment, or through international trade will play major roles in our successes. on this front, thailand has done remarkably well, registering a substantial increase in net inflow of foreign direct investment in the four years following the crisis despite the overall net capital outflow due to debt repayment within the banking sector. foreign direct investment ( to the non - bank sector ) increased from an average around 1. 4 billion us dollars during 1992 - 1996 to 3. 4 billion us dollars during 1997 - 2000