year. during the period under analysis, exports in value continued their upward bis central bankers ’ speeches trend having started since 2010 q1 and expanded by 45. 4 % y - o - y. however, following a speeded - up growth over the first two months of the year, our export growth rates were significantly mitigated in march. during the same period, imports grew by 15. 9 % y - o - y. the division of imports according to their final use highlights the rapid growth of imports of intermediate and capital goods. the outlook of these trends may be associated with expanded current account and trade deficits in the country. the bank of albania is very attentive to this development, since it significantly conditions the external balances of albanian economy and the foreign exchange market. monetary expansion during 2011 q1 was in line with economic agents ’ money demand, marking a steady year - over - year growth of roughly 11 %. the 6. 2 % y - o - y growth of real money supply remained close to historical lows. moderate growth rates of m3 aggregate and other monetary indicators are in line with so - far assessments of existence of contained monetary inflation pressures. this trend is also supported by developments of currency outside banks. this indicator continued to fall y - o - y, and together with the shift of deposit structure to longer maturity terms, it indicates economic agents ’ lower preference for liquidity. in march, the annual broad money expansion was supported by increased private sector credit, which rebounded in line with its seasonal trend path. the upward contribution of private sector ’ s demand for money has offset the gradual decline in net foreign assets. public sector ’ s demand for money has been upward, supportive to the government ’ s more active stance over the first quarter of the year. in annual terms, the private sector loan portfolio grew by 11. 5 % from 10. 3 % in february. business loan remains the main contributor to expanding the private sector lending. in the meantime, in march, household loans also showed positive signs. overall, financial markets performed positively during the first four months of 2011. the information transmitted from financial markets shows agents ’ anchored inflation expectations. key interest rate rise at end - march is passed - through to short - term money market interest rates, leading to a slight flattening of t - bill yield slope. in deposit market, interest rates continued to fall, reflecting also the correction of their high rates having been marked after 2008. the foreign exchange market has

stimulus. in advanced economies, the positive global demand momentum has led to increased aggregate demand, while the upward inflationary pressures have made the central banks respond by tightening the monetary policy. in financial markets, the public balance health has determined the yield performance in several countries, while the political tensions have elevated the demand for safer instruments. the outlook remains highly uncertain, as a consequence of higher global prices, fiscal consolidation in some euro - area countries and less space for fiscal and monetary stimulus. returning to albanian economy, the latest data on 2011 q1, obtained from business confidence surveys, the performance of external trade activity, and monetary and fiscal indicators, support the continued recovery of the domestic economic activity, primarily due to positive contribution of production sector. external demand and fiscal stimulus are factors of major influence on this growth. the data analyzed by the supervisory council show that q1 ’ s budget spending rose by 16. 8 %, sustained in part by all 12. 5 billion budget deficit increase, compared to the same period a year earlier. april ’ s data show a decelerated growth of budget revenues over this period, underlining the necessity of taking measures to observe the budget deficit projection. real economy data suggest a slow consumption growth, due to uncertainties about employment outlook. on the other hand, better performance of business credit and increase in capital goods imports suggest that investments have been positive, reinforcing the grounds for a sustainable economic growth in the future. continued business investments in turn require the response of consumer demand, about which the bank of albania judges that there is room for recovery. on the other hand, long - term investment growth will be conditioned by the ability of the albanian economy to attract foreign capital. in this context, responsible institutions at macro and microeconomic level should further strengthen the work for structural reforms, which develop the comparative advantages of the albanian economy and enhance our economic competitiveness in goods, labour and capital markets. the bank of albania judges that preserving the macroeconomic stability parameters is an indispensable condition to orient its work towards maintaining price stability and supporting financial stability at home. 2011 q1 ’ s data on trade activity performance at home show a slight trade deficit narrowing, due to increased imports and decelerated export growth over march. merchandise trade deficit shrank by roughly 0. 3 % y - o - y, accounting for 22. 1 % of gdp. import coverage by exports ratio averaged 44. 5 %, or up 9 percentage points from the same quarter of the previous