Ladies and gentlemen, over the past years, the Thai economy has been very resilient to numerous economic shocks, ranging from the oil price shock, natural disasters such as flood and drought, series of political uncertainties as well as the 2008 global financial crisis. Nevertheless, Thailand’s average annual growth rate for the last decade registered at 4.4 percent which is within the range of our estimated potential growth. The Bank of Thailand expects economic growth for this year to return to this normal trend, with moderate growth in the first half of the year and steady growth in the second half after the supply chain disruption unwound. This is the first aspect of returning to normalcy, or growth normalization, which is a feature of resilient economy. Such economic expansion is on the back of sound external and domestic demand. On the external side, however, risks to the global economy have increased recently due to damages caused by Japan earthquake, a weaker-than-expected US economy and concerns over Euro area fiscal crisis. These developments will have to be monitored closely. As of now, we expect a slightly lower global growth prospect but this should not change Thailand’s economic outlook to the extent that derails the economy from its present growth path. In particular, Thailand’s export remains robust. Supply chain disruption due to the Japan earthquake is proven to be limited and temporary; limited in the sense that impacts are mostly felt in the production and exports of vehicles.
Temporary in the sense that problems in Japan have been mitigated, at the same time, we see recovery in vehicle production for Thailand since late May. 1  JSCCIB stands for the Joint Standing Committee on Commerce, Industry and Banking. JFCCT stands for the Joint Foreign Chambers of Commerce in Thailand. BIS central bankers’ speeches  1  As for the domestic side, high income and confidence are supporting domestic economy going forward. Domestic demand, both consumption and investment have been and continue to be strong as underpinned by a high level of farm income, high employment, and good consumer and business confidence, complemented by a favorable credit condition. Tighter resource utilization also reflected these vibrant economic activities. The seasonallyadjusted unemployment rate fell to the lowest record in April. Meanwhile, the capacity utilization rate is expected to accelerate in the second half of the year following the recovery in the vehicle sector. Overall, the economic momentum in 2011 remains sound. Nevertheless, political stability remains a key factor to facilitate this ongoing momentum. Having an orderly outcome of the election is one step, but the underlying conflict must continue to resolve in order to further boost confidence and business climate in the economy. Given the current economic development, the Bank of Thailand is more concerned with inflation which is a common outcome in a good growth prospect environment. Increases in inflationary pressure have become a worldwide phenomenon particularly among emerging market economies. Thailand is no exception.