But it began to recover in April 2002. The latest figure for the whole year showed the annualised growth at almost 6%. This was a dramatic turn around. It should be noted that the export recovery did not come entirely from our traditional markets, the US and Europe. What we did see was that export to Asia increased by over 7%, somewhat higher than the average figure, with China absorbing a good 23% more of Thai goods this year compared to last. Second, farm prices improved substantially. Prices increased by 11% boosting farm income by the same percentage for the whole year. Both these factors helped improve our domestic consumption especially the sale of automobiles, motorcycles and construction. Third, there was a strong recovery of other domestic demand. Part of this was helped by the fiscal stimulation. In 2002 the budget deficit was at 3.6% of GDP. The other factor was the low interest rate environment that the Bank of Thailand has maintained for the past 5 years and is now beginning to bear fruits. The accommodative monetary policy resulted in robust growth of mortgage lending as well as other types of consumer loans. Consumer confidence rose to its highest level in recent years. Domestic investments improved too. I agree that at the moment not much of the new business investment was yet financed by bank loans. The entrepreneurs still rely more on their internal cash. But the latest investment indicators showed an annual rate of increase at a high of 23%.
In this respect, I can inform you that the government has made it very clear that they plan to consolidate the fiscal deficit to no more than 3.1% of GDP for fiscal year 2003. This is a good gradual reduction from 3.6% last year. The overall government debt is currently still at 54% of GDP, well under the cap of 60% announced in 2001. The rapid recovery of the general economy also helped boost tax revenue collection by as much as 10% in 2002, and looks set to repeat itself in 2003 as well, helping to narrow the budget deficit. Ladies and gentlemen, No one can plan for 2003 with absolute certainty. We are all following the news minute by minute, and even the best laid out plan for this year must contain several scenarios to cover for contingencies. But the one certainty I can assure you is that the macro economic policies in Thailand that aim for stability and sustainable growth will continue. BIS Review 8/2003  3