' assets and liabilities. faster gdp growth allows one to expect faster accumulation of assets and, therefore, faster improvement in the ability to service loans. however, estimating potential output growth is tricky. such estimations are roughly based on the average of the past few years'performance. today we think that potential output growth may be around 7 percent in estonia. let me remind you that a few years ago we thought it was 4 to 5 percent. upward revisions are not the problem, of course, but there are also several examples of downward revisions : portugal, greece... even poland. while credit growth has given a significant contribution to output growth, it is hardly sufficient in the long run. too high indebtedness will limit output growth potential, as loan - servicing costs will eventually curb consumption and investment. the effects of economic slowdown or recession on loan quality may be quite different over the business cycles, however. all things considered, estonian borrowers weathered the effects of the russian crisis of 1998 relatively easily. however, one has to keep in mind two things. firstly, the household credit to gdp ratio was at around 10 percent. now it is around 30 percent. secondly, the households'loan servicing ability did not deteriorate dangerously, as low - income households who suffered the most in that recession had not had access to credit. in the current cycle there are more households with an access to credit, also from the lower income deciles, indicating the spread of the effects of the potential slowdown to a wider part of the economy. the second risk factor i would like to point out is the price level of real estate. real estate prices have recently surged globally, and also in the baltic countries. the possible factors behind this increase include rapid and relatively widespread income growth, favorable borrowing conditions, and international demand. however, despite these surges, absolute levels of real estate prices remain still about two times lower in tallinn than in helsinki, in line with the difference of overall price levels. there are signs that prices are now stabilized in nominal terms and may have slightly decreased in real terms. nevertheless, relative prices of real estate have increased dramatically. whereas the ratio of price of a square meter to monthly wages is about one in helsinki, it exceeds two in tallinn. the expectations of real estate price convergence fuel credit demand in baltic countries but imply ever - increasing risks to both borrowers and lenders. ( it is fair to say, though, that the majority of real estate

the maastricht price stability criterion was a moving target, the situation was tense until april last year, when we finally received positive news that this criterion had also been fulfilled. some might call this a final stroke of luck, but it was well - deserved, especially considering all the effort, commitment, organisational skills and discipline demonstrated throughout the life cycle of the euro project. saying goodbye to the croatian kuna was perhaps a more sentimental moment for me than for other citizens. with kuna banknotes bearing my signature and the stability of the kuna having been the focus of most of my professional career, i probably have the most reason to regret its passing into history. however, we have introduced the euro for the benefit of croatia and i have never had any doubt about this being the right way. not only did croatia become the twentieth member of the euro area with the 1 / 2 bis - central bankers'speeches introduction of the euro, but it also entered into partnership with the countries using the second major currency in the world. looking forward, the introduction of the euro has opened a new chapter of our monetary history for us at the central bank. on 1 january 2023, the croatian national bank became part of the eurosystem and thus an active participant in defining a common monetary policy. furthermore, our voice in the ecb's governing council has a greater weight relative to the size of our country, and for the first time in history we are in a position to influence the financing conditions in the euro area and, consequently, in croatia. those opposing the euro might claim that croatia loses its monetary independence by joining the monetary union, but the truth is in fact the opposite : croatia has gained more power. so far we have had less room to influence domestic monetary conditions due to a high degree of euroisation, while having to ensure monetary and financial stability, often a very challenging and expensive task for a nonmember of the euro area. also, the ecb's monetary policy has had a dominant influence, leaving us no room for manoeuvre. of course, it goes without saying that in this new role we will continue to be dedicated to maintaining price stability and financial stability as well as to perform all tasks we have performed so far in line with the common procedures of the eurosystem, where applicable. finally, let me thank and congratulate each and every one of you who participated in the complex process of currency changeover. in the earlier phases of