to reduce the pace of our net asset purchases for the second quarter, while maintaining optionality to respond to changing circumstances. the calibration of net purchases for the third quarter will be data - dependent and reflect our evolving assessment of the outlook. if the incoming data support the expectation that the medium - term inflation outlook will not weaken even after the end of net purchases, we will conclude net purchases in the third quarter. but if the medium - term inflation outlook changes and if financing conditions become inconsistent with further progress towards our two per cent target, we stand ready to revise our schedule for net purchases in terms of size and / or duration. any adjustments to interest rates will take place some time after the end of our net purchases and will be gradual. the path for interest rates will continue to be determined by our forward guidance and by our strategic commitment to stabilise inflation at two per cent over the medium term. the events of the past few weeks have demonstrated europe ’ s strength and resolve in times of peril. we have agreed on an unprecedented set of sanctions that hit their target hard, but also 1 / 2 bis central bankers'speeches have material costs to ourselves. we have shown that we are prepared to pay the price necessary to uphold the universal values of peace, freedom and prosperity. these weeks have also demonstrated why many of the structural changes that were in progress before the war have now become a matter of urgency. de - carbonising the economy faster will help avert the worst climate scenarios, while lowering our dependence on outside sources of energy. the idea of strategic autonomy is no longer simply desirable – it is essential. the summit in versailles last week exemplified the united approach required to make europe stronger in all areas. some might have doubts as to whether europe can truly take this leap. we have seen false dawns before. but i believe that this time is different. many europeans have now become aware of their vulnerability and want to respond with strength and unity. and that is when change can happen. i am moved to think of the words inscribed on a remaining part of the berlin wall at the east side gallery : “ many small people, who in many small places do many small things, can alter the face of the world ”. 2 / 2 bis central bankers'speeches

state budget, gave positive impacts on the liquidity indicators in the system. now the long - term monetary assets gave a straightforward contribution on keeping inflation at low levels. inflation fell from 8. 7 percent in 1998 to 2. 1 percent in 2002. in these last three years, it was within the interval of 2 - 4 percent, as targeted by the bank of albania. 2. monetary program of 2004 pursuant to drafting and implementing the monetary policy, the bank of albania designs each year the monetary program, which is a financial plan aiming at disciplining the funds circulation in economy, in conformity with the development objectives of the country. the main objective is meeting the needs of the economy for monetary assets, without influencing the balance of demand - supply for monetary assets, generating thus inflation or shrinking the economy. the monetary program of 2004 has also been set up on the same premises. its not a secret the fact that in the coming year as well, as in the previous ones, the two main decision - making institutions of the country in the field of economics and finances, the albanian government and the bank of albania, have agreed upon the general objectives of the country ’ s development, including also the so called harmonized cohabitation between the fiscal and monetary policies. this process, albeit all, was part of a constructive consultation with institutions such as ifm and the wb, enabling thus a new financial agreement between these two institutions for 2004. table 2. main macroeconomic indicators1 real economy indicators ( in point percentage ) gdp growth 7. 8 6. 5 4. 5 - 5 6. 0 6. 0 annual cpi ( average ) 0. 0 3. 1 5. 2 2. 3 3. 0 nominal gdp ( lek billion ) 539. 2 590. 2 - 8. 2 - 6. 9 - 5. 8 - 4. 8 10. 6 fiscal indicators ( in percentage versus the gdp ) fiscal deficit - 8. 9 monetary indicators ( in percentage point ) m 3 growth 19. 9 7. 0 9. 5 3m tb interest rate 7. 8 8. 0 10. 6 7. 6 2. 1 inflation and monetary policy in 2004 the monetary policy of the bank of albania during 2003 was characterized by easing trends of the monetary conditions, in compliance with the lessening the inflationary pressures and improving the monetary indicators. the bank of albania took up the implementation of an easing monetary policy since april 2003 reducing the core interest rate by 0. 5 percentage point