year alone, we have observed two episodes, in february and again in august, of the shift toward greater risk aversions, with sharp falls in the stock markets across the world, from new york to shanghai, and bangkok included. at this juncture, there seems to be an increasing disconnect between global growth and financial stability. on the one hand, the global economy has continued and is expected to expand robustly, driven mainly by strong growth in the euro area and the emerging market economies, particularly china and india. financial stability has, on the other hand, become more vulnerable than a few years ago. recent developments in the us economy and sub - prime credit markets may indeed be an early wake - up call for policymakers and market players worldwide. the us sub - prime related problem has prompted a retrenchment from risky assets and de - leveraging, causing wider credit spreads for riskier assets classes and higher volatilities in bond and equity markets around the world. the unwinding of carry - trade and flight to quality of international capital have also been observed. importantly, the resulting disruption has already required extraordinary liquidity injections by a number of central banks to smooth market fluctuations. beside the financial sector, turmoil in the sub - prime markets also posed negative impact on the real sector, denting us growth prospects going forward. i would like to digress briefly to tell you that the direct exposures of thai financial institutions in collateralized debt obligations ( cdos ) are relatively minimal, in terms of shares of their total assets. i also like to reassure you that we are keeping vigilance on potential indirect repercussion that may arise further from the impacts of us sub - prime markets to the global economy and financial markets, as the adjustment process is likely to be protracted. moreover, we will have to wait and see how the us economy responds to the latest rate cut by the fed. in sum, the external risks facing the thai economy have been tilted more towards financial volatility rather than growth at this point. ladies and gentlemen, i have highlighted to you the risks that may likely emanate from the external front. but as recent developments in the thai economy stemmed also from internal factors, this brings me to the second part of my talk, which is the recent key developments in thailand and the outlook for 2008. this year, even though thailand ’ s growth rate has underperformed those of our peers in the region, i still

based analysis of the short - term effects of structural reforms in labour and product markets ”, oecd economics department working papers no. 948, oecd publishing. this study provides useful insights into the shortterm effects on structural reforms. see vansteenkiste, i. ( 2016 ), “ did the crisis permanently scar the portuguese labour market? : evidence from a markov - switching beveridge curve analysis ”, forthcoming. see oecd ( 2016 ) “ going for growth ”. chapter 2 of the report gives a good overview of the literature on reform priorities in a difficult macro context. see imf ( 2016a ), op. cit. a good example of the depth and detail of the greek reform programme is given in “ the second economic adjustment programme for greece fourth review – april 2014 ”, european commission occasional papers, 192, april 2014. see monteagudo et al. : “ the economic impact of the services directive : a first assessment following implementation, european commission economic papers 456 ”, june 2012. according to european commission ameco database. the latest observation is 2013. bis central bankers ’ speeches see imf ( 2016b ), " euro area : staff concluding statement of the 2016 article iv mission ", 16 june, and banerji, a. et al. ( 2015 ), " building a better union : incentivizing structural reform in the euro area ", imf working paper, wp / 15 / 201, september. bis central bankers ’ speeches