Businesses and governments are looking for best response strategies to ensure smooth expansion of their enterprises and the economy in general. Tonight, I would like to focus on 3 related and timely subjects. I will begin with my view on the outlook of the Thai economy and the risks surrounding its prospects. Then, I would like to outline what I think is necessary for monetary and exchange rate policy going forward. And lastly, I would like to talk about how we can foster private investment and what Japanese businesses can do, in your role as investors and employers, to help make Thailand an even better place to invest. Ladies and gentlemen, As you well know, the Thai economy had to weather through a host of challenges over the past 2 years. To my mind, and from the view of the Monetary Policy Committee, domestic political uncertainty, high and rising energy prices and sharp US dollar decline were at the top of our concern. Indeed, political uncertainty, coupled with rising retail oil prices, took a toll on private sector confidence and consumers’ purchasing power. These negative developments dented domestic demand during the first 9 months of 2007. The fall of the US dollar, while widely anticipated, had been a major risk that could disrupt Thailand’s robust export activities. In fact, the risk was even greater after the extent of the US financial crisis became clearer during the second half of 2007.
In the near term, I think your experience from adjusting to the yen’s sharp appreciation should be particularly helpful to your local partners. Japanese companies are capable of lending a helping hand to your local suppliers as they try to upgrade their productive efficiency. That would help smooth their adjustment process during these rough and tumble times. Ladies and gentlemen, I hope I have contributed to your understanding of the economic conditions and outlook for Thailand. The Thai economy has shown that it is resilient to adverse shocks. I am confident that our fundamentals are strong. Public investment in basic infrastructure and the Bank of Thailand’s commitment to maintain economic and financial stability should translate into moderate long-term cost of investment financing. With the awareness of what’s in store for us and the right macroeconomic policy mix going forward, we should see the economy expand favorably and in a sustainable fashion. I need not mention how crucial it is to both Thailand and Japan in ensuring that our trade and investment partnership prosper in the years to come. Thank you for your attention. BIS Review 33/2008  5