, it was up by 2. 3 %. together with the gdp figures for the third quarter, seco also presented revised figures for the first two quarters. the new figures are substantially higher than before, even after the considerable increase in the figure for the first quarter that was presented in september. most observers were surprised by the size of the growth estimate for the third quarter. what is more, the retrospective revisions have considerably modified the perception of the economic situation in the first half of the year. nevertheless, interpretation of the quarterly estimates is difficult in view of the sizable fluctuations in final demand and the fact that the main factor impacting on gdp momentum are changes in inventories. other indicators, such as the consumer confidence index, company expectations, labour demand and the continued low level of inflation expectations, appear to indicate a more modest level of economic momentum. despite the uncertainty with respect to the gdp estimates, the information currently available to us indicates that economic recovery has accelerated over the past few months. fourth - quarter indicators point to a continuation in the economic upswing. although export growth is slowing, international demand remains robust. this momentum is increasingly shifting into the domestic sector, where it is acting as a stimulus. gradually, the utilisation of industrial production capacities is improving. meanwhile, companies expect demand to pick up over the next few months. there were signs of a recovery in corporate investment in the third quarter. over the next few quarters, a high utilisation rate of technical capacity in industry and a more favourable sales outlook are likely to provide greater support for investments in equipment and a gradual increase in labour demand. as a result, the disequilibrium in the labour market is likely to diminish. in the last quarter, private consumption remained strong. since employment can be expected to increase over the course of 2006, consumer confidence should strengthen. by contrast, the stimulus provided by construction investment is likely to subside next year. in particular, we may expect that, after three years of robust growth, investments in residential construction will stagnate at a high level. overall, we project gdp growth of just over 1. 5 % this year. previously, we had expected growth to reach about 1 %. to a large extent, this correction to our growth forecast is due to seco ’ s revision of the figures for the first two quarters. for 2006, we forecast economic growth of a little more than 2 %. this would take gdp growth to a level above the potential growth

event, acted quickly and appropriately, and our actions were successful. friday ’ s announcement on open market operations to address potential quarter - end funding pressures on interest rates followed this same approach : quickly diagnose the problem, develop the right action plan, and execute that plan. at the same time, it is equally important that we examine these recent market dynamics and their implications for the liquidity needs in relation to the overall amount of reserves held at the federal reserve. we will continue to monitor and analyze developments closely. as federal reserve chair powell stated in his most recent press conference, the fomc will assess the implications for the appropriate level of reserves and time to resume organic growth of the federal reserve ’ s balance sheet consistent with the successful execution of the fomc ’ s ample reserves framework. 2 that ’ s enough on recent events for now. i ’ ll turn to another very important issue, reference rate reform. libor won ’ t last forever some say only two things in life are guaranteed : death and taxes. but i say there are actually three : death, taxes, and the end of libor. everyone in the financial services industry needs to be aware that the date when the existence of libor can no longer be guaranteed is fast approaching. i titled remarks i gave on this subject earlier in the year “ 901 days ” to remind everyone just how little time both the public sector and market participants have to prepare for a world without libor. 3 we are now 831 days away from that world, and while some institutions are making good progress, others are sticking their metaphorical heads in the sand, hoping the issue will go away. even more concerning are those wearing rose - tinted glasses, getting nostalgic about libor and hoping for an extension to the deadline or a reincarnation of the rate. i cannot emphasize enough 2 / 5 bis central bankers'speeches that the clock is ticking and everyone needs to get their firms ready for january 1, 2022. a look at the numbers, and recent history, reveals the need for urgency. there are $ 200 trillion of financial contracts referencing u. s. dollar libor. 4 but the volume of actual transactions that term libor is based on is very small. when individual banks make libor submissions they are largely based on judgment, not real transactions. this makes the rate vulnerable to manipulation, and banks are increasingly reluctant to provide submissions, adding yet further risk around using the rate. the u. k.