be weak in the second half of 2001. this is to be seen against the background of the ongoing weakness of the world economy, which depresses the demand for euro area exports. as a consequence, and also taking into account the high degree of uncertainty following the terrorist attacks of 11 september, the current environment is likely to lead to delays in investment activity and, to some extent, also to negatively affect private consumption growth in the euro area. real gdp growth in the euro area is expected to remain below potential growth also for part of next year. further ahead, however, the conditions exist for a recovery to take place in the course of 2002 and economic growth to return to a more satisfactory path. the uncertainty currently overshadowing the world economy should diminish, and there are no major imbalances in the euro area which would require longer - term adjustment. economic policies in the euro area as a whole remain geared towards price stability, the objectives of the stability and growth pact, wage moderation and structural reform. further positive effects on economic growth should stem from the impact of tax reductions in several member countries and from the fact that financing conditions are favourable. as regards the outlook for prices in the euro area, recent developments confirm our earlier expectation of a gradual decline in inflation rates, resulting from the unwinding of the previous increase in energy prices and the absence of further shocks to food prices. in addition, and crucial for the medium term, two factors support the view that wage developments are less of a risk than was previously the case. first, the slowdown in economic activity should contribute to containing inflationary pressure stemming from the labour market. second, there is now sufficient evidence that the increase in consumer price inflation was temporary, and this will help to keep inflation expectations low. looking forward, inflation rates over the next few months will probably show some volatility, on account of base effects resulting from previous price movements. however, such short - term fluctuations should not distract from the medium - term trend. we can now expect that price stability will be safely restored in 2002. this view is confirmed by bond yield developments, which are consistent with financial markets expecting inflation rates in the euro area to be clearly below 2 % over the medium term. overall, as our assessment now points to a further abatement of inflationary pressures, this allowed us to reduce the key ecb interest rates by 50 basis points. this follows three previous interest rate reductions this year, bringing the total decrease to

caleb m fundanga : transparent pricing initiative in zambia remarks by dr caleb m fundanga, governor of the bank of zambia, at the official lunch of the transparent pricing initiative in zambia, lusaka, 6 june 2011. * * * the vice president, global programs microfinance transparency, ms alexandra fiorillo ; the president of the association of microfinance institutions of zambia ( amiz ), dr. george mulomboi ; executive secretary of association of microfinance institutions of zambia, mr webby mate ; chief executives and representatives of microfinance institutions ; colleagues from bank of zambia ; distinguished invited guests ; members of the press ; ladies and gentlemen i would like to thank microfinance transparency and the association of microfinance institutions of zambia for inviting me to officiate at this important workshop on transparent pricing. i also wish to welcome our visitors from outside the country. i hope you will enjoy the wonderful zambian weather. madam vice president, the importance of microfinance to an economy cannot be overemphasised. the provision of financial services to the majority of people and the small and medium enterprises who have traditionally been excluded from the formal banking sector is a key element to poverty reduction and economic development. mr president, as you are aware, in zambia, the recent finscope survey confirmed that levels of access to financial services continue to be low with only 37. 3 % of zambia ’ s adult population reported to have access to a financial services. the survey however showed that the number of people accessing microfinance was on the increase. the role that microfinance institutions play in financial inclusion is therefore very crucial. over the years, the microfinance institutions in zambia have played a significant part in the provision of financial services, particularly for low - income households. although access to finance remains low, microfinance institutions have had a somewhat positive impact on the economic activity of low income households, in both urban and rural areas. i am hopeful that the microfinance sector will continue to bridge the financing gap especially to the unserved population. however, the bank of zambia continues to receive a number of customer complaints on the high cost of micro loans in the country. it has been observed that the interest rates charged by some institutions exceeded 300 % per annum in some cases. furthermore, in most instances the effective rate of interest and other charges are not disclosed to the customers resulting in them paying much more that what was initially publicised to them.