Thailand is resilient to sudden outflows: BOT governor

In his speech at a central bank-organised seminar today, he said foreign holdings in Thai government bonds and the bonds issued by Bank of Thailand accounted for only 9 per cent of the outstanding value. Meanwhile, corporate debt denominated in foreign currencies is at a very low level. As such, there is a low and "nearly impossible" risk that the economy would encounter another crisis like in 1997 which spurred massive capital outflows. 

Still, he said that as Thailand showed slow economic recovery, the economy would continue to face economic challenges, chiefly due to low export demand which led to low investment in the private sector. 

He noted that in this juncture, the Thai economy needed to focus more on enhancing connectivity with neighbouring countries, as exports to traditional main markets like the United States, China and the European Union were sliding. Thailand's exports to CLMV - Cambodia, Laos, Myanmar and Vietnam - in the past five years expanded by 13 per cent per annum on average. The new markets accounted for 10 per cent of Thailand's total exports in 2015, from 6 per cent five years ago. 

Veerathai noted that the Greater Mekong Subregion's significance to the Thai economy would only heighten in the future, as people in the countries enjoyed an increase in income. Meanwhile, a large pool of young and cheap labour could support Thai companies' expansion.