this outlook remain balanced. over longer horizons, the uncertainties continue to be related to persistent external imbalances in some regions of the world and their potential repercussions on the sustainability of global economic growth. this is a challenge to be addressed by sustainable macroeconomic policies and structural reforms which foster a sound balance between savings and investment in all major partner countries, enhance the production potential in the euro area and support a further expansion in trade of goods and services at the global level. with regard to price developments, hicp inflation rates over the short term are still expected to fluctuate around the 2 % level, following a rate of 2. 1 % in december, according to eurostat's flash estimate. as i have explained on previous occasions, adverse food price developments, the evolution of oil prices and increases in indirect taxes and administered prices have all adversely affected the short - term outlook for inflation. however, in the course of this year we expect inflation rates to fall and to remain in line with price stability thereafter. this expectation is based on the assumption that wage developments will remain moderate in the context of a gradual economic recovery. moreover, the past appreciation of the euro should dampen price pressures. these views are also reflected in the available forecasts and projections. we are, of course, fully aware of the conditional nature of these forward - looking exercises and therefore bear in mind all elements of risk to the outlook for price stability. in the same vein, we continue to closely monitor inflation expectations. turning to the monetary analysis, the strong monetary growth of the last few years means that there is significantly more liquidity available in the euro area than needed to finance non - inflationary growth. at the same time, the growth of loans to the private sector has been rising over recent months, benefiting from the low level of interest rates and the general improvement in the economic environment. in our view, the accumulation of excess liquidity should not be of concern for price stability as long as the economic recovery is gradual. however, should excess liquidity remain high once there is a significant strengthening of economic activity, it could lead to inflationary pressures over the medium term. we will therefore carefully examine monetary developments as they unfold. in summary, the economic analysis continues to indicate that the main scenario for price developments in the medium term is in line with price stability. this picture is confirmed by cross - checking with the monetary analysis. concerning fiscal policies, 2004 will be a crucial year for strengthening

so long ago these services were a domain of foreign companies but things have turned around now. i therefore can only encourage this positive development which is also a good sign that our insurance market is thriving, broadening and deepening for the benefit of the malawian public. ladies and gentlemen, let me also commend swift insurance brokers for their decision to open an office in mzuzu. i would like to agree with mr. mwaisimba that indeed there has been a gap in the delivery of broking services in this part of the country. this opening will offer the residents of mzuzu and certainly other parts of this region a rare opportunity to access broking services within their vicinity. i am sure most of you will agree that insurance products are not as straightforward to understand as is the case with other financial products like banking products. by its nature, insurance is a lot more difficult for a layman to understand and appreciate. this is why it is important to have professionals to advise and properly inform the public before they commit their resources to buying insurance cover. as insurance brokers, you are therefore entrusted with this noble responsibility that will help build public confidence in our insurance market. i was interested in the presentation by the business development manager, mr. mwase, particularly on the role of insurance brokers to the insured. i think there is need to emphasize that the broker largely represents the insured as opposed to the insurer unlike an agent whose role is vice versa. overall, however, let us partner each other and strive to attain a stable and viable insurance market. ladies and gentlemen, it is important, however, to realize that this ultimate goal can only be achieved if companies conduct themselves in an ethical and professional manner. as a supervisory authority, the reserve bank will endeavour to level the playing field for all market players and ensure that everyone is playing by the rule i. e. within the framework of the law and rbm regulations. it is our intention to promote fairness, soundness and stability in the market and this we will do. perhaps the only set back currently is the insurance law. as you are aware, the act is very old having been enacted in 1957. certainly it has been overtaken by events to the extent that its administration is almost ineffective in most aspects. we, however, are hopeful that the insurance bill which is pending tabling in parliament will address this challenge. finally, once again, let me congratulate swift insurance brokers & consultants