Ladies and Gentlemen, looking at the more medium-term prospects, I am convinced that the underlying fundamentals that have been attracting international investors to Thailand over the years are still in place. The country’s overall macroeconomic fundamentals remain  BIS central bankers’ speeches  1  sound against the back-drop of a healthy banking system, low and well-anchored inflation, and the government’s relatively strong financial position. A flexible exchange rate and our strong position in terms of international reserves provide ample cushioning for the central bank to be able to manage capital flow volatility. These solid fundamentals command trust from investors and credit rating agencies. Recently, Moody reaffirmed Thailand’s stable credit outlook citing that “in many respects, Thailand’s credit metrics remain well positioned compared with its immediate rating peers”. 6. Having said this, we cannot take things for granted. In fact, many problems point toward a need for structural reform. The MPC, in its last meeting, expressed concern over a number of structural issues, which, if not addressed, could restrain the country’s potential growth in the long run. These problems include fiscal sustainability, inequality in terms of both income distribution and access to education and health care, as well as supply bottlenecks such as a labor shortage. These problems cannot be solved by monetary policy, but require a concerted effort from all stakeholders. 7. In addition, as we are all aware, the prospect of the Thai economy is largely clouded by political uncertainty, which continues to impair the ability of the government to steer the economy forward.
And UK GDP has now risen for 38 consecutive quarters (albeit in the case of 2001 Q4, only just! ), the longest continuous expansion since post-war records began. Achieving low and stable inflation is the best contribution that monetary policy can make to the wider economic goals of sustainable growth and employment. Having an inflation target certainly does not mean that we ignore  BIS Review 18/2002  1  real activity. We have discretion over how rapidly we try to bring inflation back to target when and if it diverges from 2½%. And we regularly publish our best estimate about the likely future path of growth up to a two year horizon. But the aim of policy is clear - we do what is necessary to keep inflation on target. As you know, there are nine of us on the Bank's Monetary Policy Committee, and we meet once a month to make our interest rate decision. This is a rigorous process, and rightly so. But, of course, agreement on process need not, and does not, imply universal agreement on the appropriate stance of policy, as our minutes show. Indeed, an industry has grown up geared to guessing MPC members' personal habits, psychoanalysing our personalities and classifying us into different species of the aviary. But it is important to recognise, I think, that disagreements are evidence of the strength of the system, not its weakness.