Bandid Nijathaworn: Thailand’s economic conditions and prospects - a mid-year update Speech by Mr Bandid Nijathaworn, Deputy Governor of the Bank of Thailand, at a luncheon organised by the Australian-Thai Chamber of Commerce, Bangkok, 27 August 2004. *  *  *  Let me begin first by thanking the Australian-Thai Chamber of Commerce for the invitation to speak to you today. For the Australian-Thai Chamber, this is the first for me and I am very pleased to be here. Today, I plan to cover the evolving economic pictures both at home and abroad. For the global economy, a number of interesting new themes are now emerging and I will try to put these developments into the perspective as we understand it at the Bank of Thailand. As for the domestic economy, despite a number of risks and challenges, this year the economy has managed well under the circumstances. Growth momentum remains firm and economic stability remains intact. Today, I will not open up any new kind of inquiry on the Thai economy, but will simply update you on the recent economic outturn and explain the rationale behind this week's decision by the Monetary Policy Committee to increase the policy interest rate. This decision, which is the first increase in three years, has been expected by the market following signs of increased pressure on domestic prices and following our own assessment and communication to the market that low interest rates have become less necessary given the changed outlook on inflation.
For those of you who have not been home for a while, cleanskin wine is quality wine that is sold more cheaply because it is unlabeled. So, you are getting something good but you don’t know why because you don’t know what it is. Half an hour ago, the Thai economy this year to many of you was like cleanskin wine. You know the economy is doing better but you don’t know why. BIS Review 50/2004  3  In this brief space of time, I hope I have given you an adequate account of how we at the Bank of Thailand see the Thai economy evolving this year, and hopefully have helped improve your understandings of the economy. As with the cleanskin wine, I will definitely go back for more. I only hope you will do the same by continuing to have confidence in the Thai economy and remain a trusted friend and a dependable partner of Thailand for many many years to come. Thank you. 4  BIS Review 50/2004