I will point out two but discuss only one in detail. To be sure that we still recognize that this is a risk, the first risk is the next Covid-19 variant, whatever comes after Omicron. Although the public health officials have indicated that we have a high proportion of the fully vaccinated population and that the chances are that another variant might be milder, we cannot be certain. Moreover, these Covid-19 variants tend to pop up during the winter months, when they are the high season of tourism in Thailand. If another variant appears and derails the tourism recovery that we expect to see this year, this will be a significant risk to our growth outlook. The outlook that we are expecting to see is the number of foreign tourists this year in the range of 5 to 6 million, a big increase from last year but still very far off from the 40 million that we usually see. These figures also give you a sense of why we think the recovery will be relatively slow in Thailand. The second risk is the Russia and Ukraine conflict, and there are three channels by which it can impact the Thai economy, and I will flag the most relevant ones. Page 3 of 8  The first channel is through the financial markets. When some unforeseen event occurs, the financial markets get hit and become highly volatile, and there is a risk-off trade.
The stability charts – 3a and 3b – show the stability of growth and inflation in the G7 countries in the two time periods. In these charts a good performance is to be near the origin of the axes, close to the bottom left hand corner of the chart. The rather poor performance of the United Kingdom prior to 1997 is evident, as is the remarkable degree of stability in the United Kingdom relative to the rest of the G7 after that date. Of course, correlation does not imply causation. And there is little reason to suppose that the MPC is responsible for the higher average growth rate over the past decade. That more likely reflects structural changes in the UK economy, associated with other policy reforms. It is the stability of the UK economy which appears to be the most marked contribution of the MPC. That is a surprise. The conventional wisdom is that, although there is no long-run trade-off between the levels of inflation and output growth, there is a trade-off between the stability of inflation and of output growth. Inflation can be kept closer to the target only by larger changes in interest rates and bigger fluctuations in output growth. Policy-makers thus face a choice between different combinations of inflation and output growth volatility, which, when plotted on a chart, describe a “stability possibility frontier”.5 They can choose a point on that frontier depending on the relative importance they place on stabilising inflation and output growth, but they cannot move inside it.