This growth has been associated with price stability, reflected in an annual average inflation rate of 2.4 percent. The monetary conditions, characterised by historically low interest rates and exchange rate stability have favoured the rise of investments and consumption in the economy. In particular, they have also been reflected in rapid credit growth, by further sustaining the economy growth. The fiscal developments have taken place within the programmed limits, contributing to further consolidation of public finances and budget deficit control. However, the realization of capital expenditures requires a larger focus on the programmed level, as concerns the pace these expenditures have been carried out. The economic growth has been reflected also in the labour market. The number of employed persons in the country has boosted, though it has not yet fully reflected the developments in other sectors of the economy. The country’s economic activity extension has been associated with increased foreign trade exchanges. The balance of payments has been closed in positive terms, thus supporting the exchange rate stability. The quantitative and qualitative indicators of economic performance show a satisfactory growth, based mainly on the activities of services and industrial production. The sales carried out by economic enterprises during the first nine-month period accounted for about 11 percent higher than in 2005. The fact that the first quarter recorded a high annual growth of sales shows that services and production enterprises overcame the problems entailed by power supply constraints at end of 2005. The industry sector, particularly the process industry has recorded positive developments.

The country’s trade activity continues to ensure the majority of sales, and to record significant annual growth rates. It is estimated that construction sector has performed almost at the same level with that of the previous year. Direct and indirect indexes of this sector impose the necessity for a  BIS Review 80/2007  1  broader attention, particularly to a better allocation of private or public financial resources. Construction developments over the recent years, and particularly the extreme concentration of constructions on certain territories, prove the lack of efficient urban development policies, without guaranteeing long-term sustainability of the branch. Furthermore, construction continues to be dominated by housing buildings, lagging behind other strategic items, such as investments in road infrastructure, in industrial constructions, in land improvement and in agricultural infrastructure, as well as other investments directly related to the standard of living of small urban and rural communities. Agricultural production during 2006 partly recovered the growth rate decline noticed in 2005. The sector growth projection stands at 2.5 per cent for 2006, higher than the growth of 2005, but lower than the average growth rate noticed over five latest years. Investments in agricultural sector and financing by the banking system will increase in accordance with the potential of this branch, providing that hurdles arising from various structural problems are eliminated. Agricultural land is not used at maximum, because of external and internal migration and the problems with ownership titles. The relatively underdeveloped rural infrastructure makes more difficult the emerging of products in the market.