Source: IMF  BIS Review 47/2006  9  Chart 7: Contributions to growth in UK non-financial company sterling deposits Other Legal, Accountancy & Other Business Activities T ransp ort, Storage & Communication Wholesale & Retail T rade Real Estate Construction M anufacturing Utilities & Primary Industries T otal  Percentage p oint contributions to change on a y ear ago 12 10 8 6 4 2 0 -2 -4  1998 Source: BoE  1999  2000  2001  2002  2003  2004  2005  Chart 8: Employer pensions contributions Per cent of gross corporate savings 50 40 30 20 10 0 1990  1992  1994  1996  1998  2000  2002  2004  Source: ONS  Chart 9: Employer pensions contributions £ billion, 2005 prices 60 50 40 30 20 10 0 1992  1994  1996  1998  2000  2002  2004  Source: ONS; dat a shown are expressed in 2005 prices using RP I inflat ion  10  BIS Review 47/2006  Chart 10: One-off and regular employer pension contributions  £ billion 35  Regular contributions Special/one-off contributions  30  Total employer contributions  25 20 15 10 5 0  1992  1994  1996  1998  2000  2002  2004  2005  Not e: Covers self-administ ered occupat ional schemes only Source: ONS  Chart 11: UK business investment Per cent of GDP, constant prices  14 12 10 8 6 4 1990  1993  1996  1999  2002  2005  Source: ONS and BoE calculations  BIS Review 47/2006  11  Chart 12: UK business investment recoveries  percentage difference from trough in I/Y ratio 30 25 20  Average of past recoveries  15 10 5  Current  0 -8  -6  -4  -2  0  2  quarters relative to trough  4  6  8  Source: ONS and BoE calculations  Chart 13: Revisions to UK business investment Percentage change on a quarter earlier  Initial Estimates  12  Suse que nt Estimate s  9 6 3 0 -3 -6 -9  Late st Data  -12 1993  1995  1997  1999  2001  2003  2005  Source: ONS  Chart 14: Long-maturity real sterling forward rates Per cent 6 5 4 3 2 1 0 1986  1991  1996  2001  2006  Source: Bloomberg and BoE calculat ions  12  BIS Review 47/2006  Diagram A: Stylised effect on equity returns of a fall in risk premia  One-period ex-post equity returns Time T  Time T+x  Premium falls by Y% each period Preshock steady state returns  Post shock steady state returns  time  BIS Review 47/2006  13

I take this opportunity to point out that the Bank of Albania’s efforts to keep inflation in check and anchor inflationary expectations, as well as its regulatory and supervisory measures to guarantee financial system stability managed to reduce shock-buffering costs and prevented undesirable consequences. Second, as regards the economy’s expected performance in the medium and long run, the conclusion reached after the two-week long consultations was that the Albanian economy is expected to remain in positive territory of economic growth. However, growth rates will clearly depend on the resurgence of the domestic demand, which is suffering from insecurity related to national and international developments. Consumption and investments continue to suffer from added prudence by economic agents, while financial conditions and banking system capacity to credit the economy are improved. Furthermore, higher inflation rates, noted during the first months of 2011, are expected to drop in the upcoming period. This reveals the foreign origin of shocks that have led to increased prices and reflects internal economic and financial conditions as well as our monetary policy. The joint examination of the Albanian economy found that the fiscal and external sectors are the two main ones that would require our attention and our work in the future. The Bank of Albania has long held that public finances’ long-term stability is a precondition for sustainable economic growth. The daily world press illustrates channels through which indicators such as budget deficit and public debt affect financial markets and in turn the real economy.