mainly focused on the energy sector. there are currently 643 austrian firms operating in turkey. distinguished guests, the european union is a success story regarding peace and cooperation among nations with rather bitter historical memories. no wonder the european union obtained the nobel peace prize in year 2012. despite all the debates and a high degree of uncertainty regarding the new economic governance structure in the eu, i sincerely believe turkey ’ s closer cooperation with austria will bring invaluable outcomes in line with the european spirit. to conclude, i would like to express my view that the future of the commercial, financial and economic relations between austria and turkey looks more promising than ever. today ’ s joint meeting and the opening ceremony of the exhibition “ contemporary turkish painting and printmaking in the republican era ” are small, symbolic, yet quite significant steps to mark the start of this new and healthy trend. thank you very much for your attention. bis central bankers ’ speeches

; the decline in services inflation came to a halt in the first quarter of 2008. elevated food and energy prices have been exerting upward pressures on the prices of catering and transport services. rents and other services, on the other hand, have continued to decelerate ( figure 4 ). figure 4 : subcomponents of services index ( first quarter cumulative percentage change ) 2006 - 2007 average rent transport services restaurants and hotels other services source : turkstat, cbt. distinguished guests, global uncertainties and their reflections on the domestic financial markets have led to exchange rate movements, which in turn affected march inflation especially through the prices of fuel and high - tech consumer durables. the first round effects of exchange rate pass - through are expected to continue in the short term. inflation in cpi excluding food, energy and tobacco items remained flat over the previous quarter and remained at 4. 8 percent, confirming that the rise in inflation can be mostly attributed to factors beyond the control of monetary policy ( figure 5 ). the recent rise in core inflation indicators has reinforced the risks related to second - round impacts of previous shocks. figure 5 : main inflation indicators and policy rates policy rate h ( right axis ) h exc. processed food ( right axis ) 03 / 08 12 / 07 09 / 07 06 / 07 03 / 07 12 / 06 09 / 06 06 / 06 03 / 06 12 / 05 h : cpi excluding unprocessed food, energy, alcoholic beverages, tobacco and gold. source : turkstat, cbt. dear members of the press, elevated prices of crude oil, food / agricultural products and other commodities continue to exert inflationary pressure ( figure 6 ). as a result, inflation has recently been rising worldwide ( figure 7 ). inflation in developed economies edged up in the last quarter of 2007, while emerging economies with inflation targeting have faced an upward trend since june 2007. by the end of the first quarter annual inflation in turkey was 9. 2 percent, which is below its end2006 level of 9. 7 percent. during the same period, the average inflation in emerging market economies with inflation targeting rose from 3. 4 percent to 6. 1 percent. figure 6 : s & p goldman sachs commodity price indices commodity prices metal prices energy prices ( right axis ) agricultural prices ( right axis ) 3 / 12 / 2008 11 / 14 / 2007 24 - 07 - 2007 29 - 03 - 2007 01 - 12 - 2006 09 - 08 - 2006 17 - 04 -