Both figures are well below those of our regional peers, suggesting that we are relatively more immune to abrupt capital flights. On the external stability front, Thailand continues to perform well across most indicators. Last year, our current account recorded a large surplus of over 8% of GDP, and it is expected to grow further this year. Moreover, we continue to have more than enough international reserves to cover our foreign debt obligations. Our banking system continues to be strong, with ample capital buffer and cushion against bad loans. Their capital adequacy ratio continues to be well above the required level of 8.5%, and has increased slightly since my last address. Moreover, amid the gradual economic recovery, banks continue to accumulate high level of loan loss provision to cushion for deteriorating loan quality. The aggregate NPL figure remains manageable at around 2.7% and the combined profits of the banking sector remain sizeable despite being slightly trimmed by the additional loan-loss provisioning. Ladies and Gentlemen, Maintaining sufficient buffers have proved essential in coping with the financial turbulence of the past year, as they helped to shield the economy from facing the full impacts of external shocks. Besides the financial system, the real economy has also been a beneficiary of stable financial environment. In the first half of this year, the Thai economy expanded by 3.4%.
This has been a critically important factor in alleviating the impact of the pandemic on the labour market and on banks’ lending. We judge that the economy still needs that support if the recovery is to continue and strengthen further. Ambitious fiscal measures by national governments were complemented by a € billion European safety net. And with the Next Generation EU fund, Europe took a decisive step forwards as the crisis evolved. For the first time, a common budgetary instrument at European level can be used to complement fiscal stabilisers at national level, even if it is currently only temporary. As a result, we now have an aggregate policy mix in which fiscal and monetary policy reinforce each other in supporting the recovery, and thus underpin medium-term price stability. The case for jointly shaping Europe’s future We must now carry this positive momentum forwards. It is time for Europe to move beyond the initial priority of containing the immediate impact of the crisis and shape a common vision for its future. The pandemic has the potential to accelerate trends that were already emerging before the crisis; trends that will lead to structural changes in the global economy. In a world where technological change and geopolitical tensions are transforming the geography of value chains, we should make full use of the size and diversity of the European economy. If we strengthen Economic and Monetary Union and deepen the Single Market, we do not only benefit all Europeans by improving the way we produce, distribute and consume.