inflationary pressures in the medium run. lending to the private sector recorded an annual growth of 9. 0 % in march. its performance, particularly in the recent months, was determined by the low private sector demand for credit and the cautious bank lending behaviour. financial markets were liquid and stable. interbank market rates dropped significantly in april and the trading volume in this market increased. the pass - through of easing monetary policy signals persisted in the lek deposit market as well, as reflected by the lower interest rates. government security yields in the primary market remained at similar levels to the previous month. their increase in the first quarter of 2012 reflects the developments in supply and demand - side structural factors, hence signalling no added inflation premiums. interest rates on lek - denominated loans did not fully respond to the easing monetary policy signals due to the higher credit risk premiums in particular branches of the economy. new information supports our previous projection that the gdp growth will remain below its potential in the quarters ahead, owing to the moderate contribution of foreign demand, lack of fiscal stimulus and sluggish domestic demand. the two main components of the latter, consumption and private investment, remain slow. the incomplete utilisation of capacities, coupled with the slow rise in wages and unit labour costs, are expected to exert contained inflationary pressures in the period ahead. economic agents ’ inflation expectations are anchored close to the target. they, however, may be subject to the response to global developments in the short run. the gradually subsiding supply - side shocks in the period ahead, the termination of base effects ’ impact and the extended effect of the bank of albania ’ s stimulating policy are expected to be followed by an rising inflation trend, thereby approaching the bank of albania ’ s target in the medium run. the bank of albania has continuously eased the monetary policy in the recent months, aiming at meeting the inflation target in the medium run, and keeping the inflation expectations and risk premiums in the economy under control. this policy has aimed at responding to a situation where the main obstacle to the recovery of private sector demand and foreign direct investment relates to the uncertainty for the future and approach to risk, in the short and medium run. we consider that the provision of a cautious monetary stimulus, bis central bankers ’ speeches conditioned by the control of risk premiums and safeguard of financial stability, is major contribution the bank of albania can make to the stable and long - term economic growth in albania. * * * based on

mr. brash points out some positive aspects of new zealand ’ s situation in the world economy address by the governor of the reserve bank of new zealand, dr. donald brash, to the construction liaison group in wellington on 26 / 6 / 98. introduction over recent months, there has been a great deal of negative economic news. in countries as diverse as italy and japan, gdp data for the march quarter have been released suggesting economic activity is slowing down. growth in industrial production in the 14 countries which we monitor most closely in preparing our own economic forecasts was projected to be just 0. 1 per cent in 1998 in the june consensus forecasts, a significant fall from the increase of 3. 8 per cent expected last november, and even a fall from the 1. 0 per cent increase expected as recently as last month. financial markets have been extremely turbulent, with particularly volatile trading in the foreign exchange market and some equity markets. where is the world economy going, and how will new zealand be affected? it is always risky being too definitive in answer to questions of this kind, because in reality nobody can know the answers with any confidence. but it is particularly dangerous to give answers at this time. if one suggests that the world economy is in for a very rough ride, and new zealand with it, one is accused of undermining confidence and making the situation worse. if one points out some of the positive aspects of new zealand ’ s situation, one is accused of being hopelessly unrealistic. today i will try to be totally realistic. you may not agree with me, but i will not gild the lily. the implications of the situation in asia are serious for new zealand in our december 1997 monetary policy statement, we estimated that growth in our trading partners would average 1 per cent less than otherwise over 1998 / 99 due to the events in asia, and in releasing that document i commented that the most obvious risk to our economic projection was that the difficulties in asia would turn out to be even more serious than we assumed at that time. in the intervening six months, the situation has indeed become markedly worse. whereas in november 1997, the consensus forecasts projected japan ’ s industrial production to grow by 1. 6 per cent in 1998, the comparable estimate in june 1998 is minus 4. 0 per cent. whereas in november 1997, the consensus forecasts projected korea ’ s industrial production to grow by 8. 2 percent in 1998, the comparable estimate in june 1998 is minus 7