the first is our assessment of the inflation outlook in light of the incoming economic and financial data. this assessment will be informed primarily by our staff macroeconomic projections, on which all data are incorporated in a coherent manner. in this regard, the staff march forecast pointed to a weakening of activity in 2023, with real euro area gdp expected to grow by 1 % in 2023 ( compared with 3. 6 % in 2022 ). this scenario is somewhat more optimistic than that of the previous projections ( published in december ), reflecting better than expected recent economic data and the fall in the cost of energy, so that real income losses are lower. growth is expected to pick up, to 1. 6 %, see “ an overview of the ecb ’ s monetary policy strategy ”. in both 2024 and 2025, based on a robust labour market, improving confidence and the recovery of purchasing power. however, these growth rates are lower than projected in december owing to a stronger tightening of financial conditions, including a larger appreciation of the euro exchange rate. and, in any case, the accumulated growth path expected now for 2022 - 2024 is significantly lower – around 2. 5 % lower – than that projected in december 2021, before the war in ukraine, reflecting the material deterioration of euro area terms of trade. on inflation, the baseline scenario is one of gradual convergence of inflation to our 2 % target. after peaking at 10. 6 % in october last year, hicp declined to 6. 9 % in march this year, according to the flash estimate, on the back of lower energy prices and base effects. by contrast, food price inflation and underlying inflation ( excluding energy and food ) have continued to rise, surprising on the upside and posting high rates in march ( of 15. 4 % and 5. 7 %, respectively ). headline inflation is expected to remain high for the rest of 2023, albeit on a downward path that will take it to 2. 8 % in the last quarter of the year. this drop in inflation is mainly explained by the energy component, while underlying inflation is expected to remain elevated. specifically, the ecb projections point to inflation averaging 5. 3 % in 2023, before decreasing to 2. 9 % in 2024 and to 2. 1 % in 2025. this downward trend would be underpinned by the gradual disappearance of upward pressures from the reopening of the economy, previous supply - side shocks ( supply bottlenecks and

njuguna ndung ’ u : developments in kenya ’ s insurance industry sector remarks by prof njuguna ndung ’ u, governor of the central bank of kenya, at the launch of continental reinsurance brand and products, nairobi office, nairobi, 5 july 2012. * * * the chairman, continental re, nigeria distinguished guests, ladies and gentlemen. many thanks indeed to continental reinsurance for having invited me here today at this auspicious occasion where continental re is launching its brand in kenya. it is extremely heartening to see such a strong attendance for this breakfast meeting. firstly, allow me to spend a few moments to reflect upon the future of the kenyan insurance industry based on my experience, and to provide some thoughts and advice on where reinsurers such as continental reinsurance can contribute additional value in the sector. the kenyan insurance market wrote kshs. 100 billion of gross direct premiums in the year 2011. it has grown at an average rate of 16 % p. a. over the last 5 years. the market comprises of 45 insurance companies, transacting long - term and short - term insurance business. in addition, there are over 140 insurance brokers operating in the kenyan insurance market. competition is strong and therefore clear market positioning is essential. i am standing here today wearing two hats : one, as regulator of the banking sector and secondly, as a board member of the ira. i have seen that there is a strong requirement for products that are driven by a real need from customers – products that appeal to a specific demand. i am happy to note therefore that the industry is addressing the matter of innovation and are designing new products particularly targeting the lower market. this is the way in which the insurance industry will be able to enhance the level of financial inclusion among the population. by way of example, let us look at the agricultural sector – which, comprises a vital 80 % of our economy with a 26 % contribution to gdp. insurance and reinsurance should play a bigger role in the development of the agricultural sector in kenya. i am sure that, weather - index micro insurance schemes are making a measurable impact where payouts enable farmers to recover from what would otherwise be financial disaster. for instance in august last year, 3, 380 farmers received compensation for the loss of their crops, totalling approximately kshs. 150 million. the transfer of weather risk away from these farmers to the international insurance markets strengthens the resilience of farmers and agricultural businesses to