In this regard, greater clarity about the large public investment projects will be crucial in putting both public and private investment back on track. The continued high capacity utilization and investment promotion applications to the Board of Investment have pointed to stronger appetite for investment once the investment climate becomes more favourable. During this period of uncertainties, monetary policy has become more accommodative in line with declining inflation and low risks of picking up going forward. Latest data for August showed headline inflation at 1.1 percent and core inflation at 0.7 percent. Set in this light, the Monetary Policy Committee cut its policy interest rate in total by 175 basis points since the beginning of this year. The aim is to stimulate the domestic demand to offset the expected slower export growth in light of the slower US economy and baht appreciation, though exports still remains an important driver of growth for next year. Latest economic forecast projects the economic growth to lie between 4.5-6.0 per cent in 2008, while core inflation is expected to stay comfortably around 1.0-2.0 percent. Given the appreciation trend of the Thai baht thus far, we cannot deny that certain industries, especially those who rely more on the high local content materials, have been affected far more than those who rely more on the import-content materials.
Specifically, the  4  BIS Review 104/2007  latter Act will stipulate prompt corrective action and grant the Bank of Thailand power to conduct supervision on a consolidated basis. The current Financial Sector Master Plan (FSMP) will move into its second phase, with an emphasis on increased competition and consideration on potential entry of new players to further enhance financial efficiency and resiliency. Our accession to the Basel II accord will upgrade the risk management of banks to the best standard and will further enhance financial sector stability. Ladies and Gentlemen, To end my talk today, I would like to emphasize that policymakers must avoid misplacing the focus of policies just on short-term issues. They must instead always weigh very carefully between short-term and long-term objectives toward achieving strengthened resiliency of the overall economy. Only with such resiliency, will a small open economy like Thailand be able to sail through the waves of global financial turbulence in the years ahead. BIS Review 104/2007  5