the central bank. external sector stability supports the enhancement of market sentiments. on the fiscal front, positive impacts of fiscal policy reforms are becoming evident in the government's finances, marked by a significant increase in tax revenue collection, while the implementation of cost reflective pricing mechanisms has helped improve the financial performance of state - owned business enterprises. the government's steadfast commitment to a revenue based fiscal consolidation path, in conjunction with the continued execution of the economic reform programme aligned with the imf - eff arrangement, is expected to continue. since most of the tax policy reforms are frontloaded in this reform process, the revenue enhancement in the forthcoming period would be more focused on improving tax administration and widening the tax net rather than increasing taxes. key pieces of legislations related to public financial management, public debt management, and anti - corruption have been enacted recently, which are pivotal to strengthen prudent management of public finance and debt, transparency and accountability. in addition, reforms in state - owned business enterprises ( sobes ) and divestment of non - strategic investments would reduce the burden of sobes on the government budget. alongside the successful external debt restructuring process, these measures are expected to facilitate the achievement of mediumterm fiscal targets and ultimately restoring long term fiscal sustainability which is prerequisite for medium term growth. enhanced fiscal discipline along with the 2 / 5 bis - central bankers'speeches improved financial performance of the key state - owned enterprises ( soes ) would help to free up more funds available in the banking system towards productive purposes of the private sector. the financial sector, which endured difficult macroeconomic conditions in recent years, remained resilient amidst the crisis owing to proactive and prudent regulatory actions of the central bank and the compliance and crisis preparedness of the financial institutions. central bank provided regulatory guidance to the banks and non - bank financial institutions during the crisis time to ensure their resilience with adequate capital and liquidity. an asset quality review was conducted as part of the bank diagnostic exercise and the central bank developed a roadmap to address issues related to capital and foreign currency shortfalls based on the aqr, expected impact of debt restructuring and forward - looking stress testing. on that basis we expect the financial sector's resilience to improve further as macroeconomic vulnerabilities dissipate in the upcoming period. also, an array of structural, legal, and policy level reforms and innovations will continue to be mobilised to ensure the stability

this, at least, is what we can gather from a comparison with surveybased inflation expectations, which at last report fell only a very little or not at all and are running much closer to the definition of price stability. however, the risk of de - anchoring naturally increases, the longer economic agents observe an inflation rate which they perceive as being sustainably below the definition of price stability. the new forecast picture therefore certainly did present quite a monetary policy challenge and exposed a need for action to be taken. on this topic, there was agreement within the governing council of the ecb. but taken as a whole, i think the decisions went too far, and the comprehensive package of measures didn't win me over. my reservations concerning government bond purchases in the euro area are well known. similarly, the latest downturn in the outlook for prices and growth still leaves me unconvinced of the alleged need to use this instrument, one that i regard purely as an emergency instrument. for this will ultimately lead to a dangerous commingling of monetary and fiscal policy. even after taking note of the latest forecast revisions, i still see a very remote risk of a deflationary spiral. it is a fact, however, that the governing council of the ecb is striving for an inflation rate of below, but close to, 2 % in the medium term in order to fulfil its mandate of price stability. one reason why the central banks of the major currency areas generally aim for an inflation rate of just under 2 % is because slightly positive rates of price increase provide a certain safety margin to the lower bound on interest rates. as we now know, this bound is not exactly at zero, nor is it significantly below that level. if the inflation target is too low, a central bank's scope for stimulating the economy using conventional instruments can quickly be exhausted. naturally, the target ought not be too high, either, as we all know that inflation is costly. and not just when inflation rates hit the double digits. which is precisely the reason why many central banks across the world now have the mandate to safeguard price stability. maybe a comparison with a ship will help to illustrate the situation. a ship ought to have enough water below its keel at all times in order not to run aground. at the same time, too much water would prevent the ship from casting its anchor. it is important to emphasise that our target is a medium - run one. the medium run does