in terms of flexibility ; • our public finances have been put in order and the country ’ s balance of payments is in a good condition. all these factors lead us to believe that our economy can rebound once the international economic slide has been halted. the international monetary fund is forecasting an upturn in europe from 2010 onwards in the wake of a recovery expected to begin in the us. in switzerland, initial signs of stabilisation are appearing here and there, and the decline in gdp should gradually become less steep in the near future. but a true reversal of trend is unlikely to occur before next year and recovery will be a slow process, since the current difficulties are more than just cyclical. they are partly the result of a profound crisis of confidence in the soundness of the financial sector and the future growth potential of the global economy. faced with collapsing demand, all countries have adopted expansionist monetary and fiscal policies. interest rates have been slashed and a number of relief packages involving considerable sums launched, exacerbating the public debt burden. such strategies are appropriate in times of emergency. nevertheless, we should always bear in mind that the difficulties confronting us today are in all likelihood the consequence of excessive borrowing and of monetary policies that were too accommodating – two factors that helped derail the international economy. strange as it may seem, the stimuli used in the battle against recession today are the very ones that were abused in the past. moreover, once the economy is back on track, the prime political and economic challenge will be to put in place the corrective measures needed to ensure a more balanced course in future. the subsequent path of growth may not be as steep as it was in the past, but for that it will be all the more sustainable. for our part, we are aware that maintaining price stability in our country over the medium term will require us to re - establish healthy monetary conditions by absorbing excess liquidity in good time. we have both the means and the will to do so. * * * the global economy has entered a painful phase of putting its house in order ; a phase marked by weak growth and high unemployment. profoundly embedded as it is in international trade, the swiss economy cannot escape these difficulties. the snb reacted swiftly to the deteriorating economic situation, and many people hoped that the monetary policy adopted could shield our country from the turmoil experienced elsewhere. however, it was not in our power to meet these expectations. we did all we could within the framework of our

of labor productivity, defined as output per worker, and the ratio of workers to total population, and calculate the former for each of the four comprehensive sectors of the economy : agriculture, manufacturing, nonmanufacturing industry ( mining, utilities and construction ), and services. in the most recent worst - performing period, with available data for 1980 – 2005, three basic observations are noteworthy. first, meager per - capita gdp growth during these years was the net result of an increase in the ratio of workers to population, whose effect slightly surpassed that of a fall in aggregate labor productivity. second, aggregate labor productivity fell because, relative to total labor in the economy, production dropped in agriculture and nonmanufacturing more than it grew in manufacturing and services. in other words, the increasing role of manufacturing and services in the mexican economy did not sufficiently compensate for the diminishing influence of the other two, smaller sectors. table 1 third, sectoral labor productivity increased only in the least and in the most productive sectors : agriculture, mainly because of labor emigration, and manufacturing. in the other two sectors labor productivity declined at roughly the same pace. table 2 it seems that if some aspects are highlighted as obstacles to economic expansion, they should be proven to have a significant influence on those sectors identified as negative contributors to productivity growth. specifically, the fall of labor productivity in the services sector should be given more importance than that observed in nonmanufacturing, when the relative sizes of these two sectors in the economy are considered. at a conjectural level, one might identify a possible common characteristic between the two, given that the fall in nonmanufacturing labor productivity has been concentrated in construction and that in services has been generalized, with the only exception being transport, storage, and communications. a large part of both construction and services exhibits a high degree of informality. it is well known that informality is linked to small - scale production, low investment in new technologies, and poor incentives for human capital accumulation. additionally, a prominent feature of large service segments, such as education and health, is a lack of or limited competition among providers, lowering incentives to seek efficiency. on the other hand, one must find possible reasons as to why manufacturing has not registered more robust labor productivity growth. it might be the case that the opening up to foreign competition has taken many years and until recently allowed a certain degree of protection, especially from competition with countries not covered by free trade agreements.