Key drivers should carry their growth momentum going into H2/22 as we see high growth in consumption and better-than-expected tourist numbers, as well as more broad-based improvement in employment and income. Despite softening global economic outlook, tourism is gaining traction from pent-up demand to travel and not that sensitive to global slowdown. b. For stagnation to occur, we should expect to see severe slowdown in key drivers. For example, we should expect to see very low tourist numbers for the remainder of this year or sustained price increases that severely affect consumption. This is unlikely to occur. (4) Most concerning risk to a smooth recovery is risks to the tourism sector from unpredictable and volatile shocks, e.g. a new covid variant which could trigger a ban on international travel, and geopolitical risks. Part 4: Concluding remarks 1. Aggressively rate hikes in order to curtail aggregate demand and bring down high inflation may be the right approach for some. It is however not universal and depends critically on the underlying nature of high inflation, the cyclical position of economic activity, as well as structural features of the economy that determine the degree of persistence of price shocks. The right policy approach is thus more nuanced and country-specific. 2. In the Thai context, the decision to start a gradual and measured monetary policy normalization only recently reflects our cyclical position, where the recovery is gaining traction later than others.
6 See Altavilla, C., Canova, F. and Ciccarelli, M. (2019), “Mending the Broken Link: Heterogeneous Bank Lending  and Monetary Policy Pass-Through”, Journal of Monetary Economics (forthcoming) and Kayshap, A. and Stein J. (1994), “Monetary Policy and Bank Lending”, in Mankiw, G. (ed.) , Monetary Policy, Studies in Business Cycles, 29: 221–56, Chicago, University of Chicago Press; van den Heuvel, S. (2002), “Does bank capital matter for monetary transmission?”, Economic Policy Review, Federal Reserve Bank of New York, May, 259–265. 7 See Budnik, K. (2019), “Abird’s-eye view of the resilience of the European banking system: results from the new  macroprudential stress test framework”, Macroprudential Bulletin, 7 (March), European Central Bank. 8 See Altavilla C., Boucinha, M. and Peydró, J-L. (2018), “Monetary policy and bank profitability in a low interest rate  environment,” Economic Policy, 33(96): 531–586. 9 See Andersson, M., Kok, C., Mirza, H., Móré, C. and Mosthaf, J. (2018), “How can euro area banks reach  sustainable profitability in the future?”, Special Feature, Financial Stability Review, November, European Central Bank. 10 See Brand, C., Bielecki, M. and Penalver, A. (eds.) (2018), “The natural rate of interest: estimates, drivers, and  challenges to monetary policy”, Occasional Paper Series, No. 217, ECB, Frankfurt am Main, December. 11 See, for example, Holston, K., Laubach, T. and Williams, J. (2017), “Measuring the Natural Rate of Interest:  International Trends and Determinants”, Journal of International Economics, 108 (Supplement 1, May): S59–75. 12 Andersson et al. (2018), op. cit.