give you a few examples. inflation expectations remain anchored. healthy corporate balance sheet from past savings and profits will allow firms to rebuild and re - invest. corporate lending remains high despite some headwinds to the banking sector. these headwinds include the effect of the flood and global uncertainty on the macroeconomic outlook and on loan quality, as we have seen some pressure on the delinquency rate. the new fidf fee will also have some effect on banks ’ bottom line. nevertheless, the thai banking system will be able to handle these challenges given a strong capital base as a result of continued profitability in the past ten years, a good risk management system, and strong risk - based supervision. therefore, thailand ’ s key fundamentals remain resilient in the face of these challenges. most importantly, human resources and know - how remain intact. history shows that no matter how severe the natural disaster, roads can always be rebuilt and buildings restored in a relatively brief span of time should the human spirit remain, as it does in thailand. the growth rates i have mentioned for 2012 and 2013 are consistent with the medium - term trend, as strong fundamentals mean that thailand ’ s long - term growth trajectory remains intact despite the flood and volatile external environment. an important reason for this is bis central bankers ’ speeches that thailand is well positioned geographically to reap the benefits of growth in asia. the rise of china and the asean economic community ( aec ) provide enormous growth opportunities from economic integration. for sure, there will be more competition. but our research shows that trade gains will be substantial, from both inside and outside the region. however, there is a catch. to reap these gains, the thai economy will have to undergo structural adjustment, that is, the flow of labor and capital from sunset to sunrise sectors. the exact form of adjustment is uncertain, as it depends on global developments. however, what is quite certain is that the size of structural change required will be large, comparable to what thailand experienced during the economic liberalization of the 1980s and 90s. this change, almost by definition, will not be easy. if thailand overcomes this hurdle, it will benefit from exporting more goods, possibly more hi - tech, to the region while becoming part of the regional supply chain and enjoying a greater range of imports. but while the domestic outlook appears positive, the global environment remains uncertain. the lingering euro debt crisis and fragile us recovery continue to weigh on global growth. why

? current technical solutions do not address deep - rooted long - term problems. as a result, resolution has been delayed, adding to uncertainty. moreover, the longer the delay, the more interest rates and fiscal stimulus in both the us and euro area will be pushed to new limits. the tightened policy space means that new shocks will be hard to manage and could derail the ongoing recovery. in my view, it appears that the global economy currently lacks the clear leadership especially in regards to getting the advanced economies out of the woods. countries which had previously provided the leadership for global macroeconomic management through, for example, the international monetary fund, are now caught in the dilemma of solving their own economic problems versus choosing policy options for the greater good of the global economy. this is a separate issue deserving of its own discussion. let me now turn to the policy options going forward, particularly from the perspective of bot. ladies and gentlemen, as the global environment remains uncertain and without global economic leadership, it is even more important than before that the bot policy strikes the right balance between accommodating the domestic recovery while ensuring stability in the long - term. currently, monetary policy has shifted toward addressing domestic and global challenges to growth. the combination of domestic and external events has contributed to the mpc ’ s decision to lower the policy rate. on the domestic front, the key factor was the flood — its economic impact proved to be larger than expected. at the same time, domestic inflationary risks look to moderate. on the external front, risks to global economic growth increased due to the fragile us recovery and the lingering euro debt problem. while the policy rate has come down due to risks to growth, the mpc also has its eye firmly fixed on long - term macroeconomic stability. as such, the mpc views current interest rates as supportive of long - term economic stability. i would also like to say that in response to the challenging global landscape bot will undertake policy actions that will serve to anchor long - term macroeconomic stability, enhance thailand ’ s competitiveness, and augment economic adaptability. here i want to stress that the bot has consistently adhered to the principle of conducting policy that ensures long - term sustainable growth. on augmenting economic adaptability, the bot will ensure that the exchange rate moves broadly in line with the underlying economic fundamentals while its volatility is manageable by thai businesses. in the long run, we view a flexible exchange rate regime as the most effective