BOT's fieldwork mission: gathering news from the front line

Some people may believe that the central bank looks only at statistics and does not realise what is happening in the real economy. As one of the central bank's staff, I would like to say that we often have chances to share ideas with people from the real economy. Although our office is located at Bangkhunprom Palace, we always leave the office for meetings with many people, from scholars to businessmen, from the financial to the real sector, and from Bangkok to other provinces.

Dialoguing with stakeholders is one of the central bank's proactive communication policies. It provides a chance to explain to our stakeholders how monetary policy was formulated, as well as to collect first-hand economic information from the private sector. This means of communication is employed by many monetary authorities around the world, as seen through the Agents' summary of business conditions of the Bank of England, the Beige book of the US Federal Reserve, and the Business Liaison Programme of the Australian Treasury.

From the Bank of Thailand's side, there are three main channels for gathering and exchanging information from the private sector. First, the central bank conducts the Business Condition Survey on 1,500 firms nationwide, both manufacturing and non-manufacturing, on a monthly basis. Second, the central bank established the Economic/Business Information Exchange Programme in 2004, aimed at conducting dialogue with executives of companies or business associations on current economic and business conditions as well as outlooks. More than 800 dialogues with firms are conducted per year by staff from the central bank's headquarters and three regional offices. Finally, the central bank sets up meetings between its top executives, such as the deputy governor and assistant governors, and regional businessmen six times a year. As of this month, meetings have already been held in Chiang Rai, Khon Kaen, Krabi and Nakhon Ratchasima. For the rest of this year, there will be two meetings in Sukhothai and Trang.

All dialogues with the private sector, no matter big or small firms, provide valuable information on economic developments for policymakers. As the information comes from market practitioners, it contains experiences and forward-looking views that cannot be retrieved from statistics alone. In particular, when an industry or the economy encounters a shock, the dialogues help the central bank assess comprehensively its cause, impact and the dynamics of the adjustments to the shock. For instance, during the supply disruption due to Japan's natural disasters in March, dialogue with firms in the vehicle and electronics industries helped the central bank analyse the situation and impact on the economy more precisely and profoundly. To make policy decisions, the Monetary Policy Committee analyses all information gathered from these dialogues together with other economic data, as well as the results from an econometric model in order to comprehensively assess current economic conditions and outlook. Therefore, I would say that if you provide information to the central bank, you are participating in the formulation of monetary policy for the country. The more accurate and inclusive the information is, the better the monetary policy responses, and you can help to improve it!

Last but not least, to ensure confidentiality, the central bank strictly follows a privacy policy of not disclosing individual information, while overall business development will be published for the benefit of public policy and business planning. The monthly business sentiment index and quarterly business reports can be accessed at the Bank of Thailand's website at www.bot.or.th.

The views are the author's own.

Nitisan Phongpiyaphaiboon is an economist with the Economic Intelligence Team, Bank of Thailand.