in the first half of 2003. this deceleration in economic growth was spread across most sectors, with agriculture output actually contracting in the first half of 2003. the slower growth was accompanied by an increase in aggregate employment in the formal non - agricultural sectors of the economy in 2002. an employment gain of 54 000 workers was recorded. however, preliminary indicators point to a loss in employment opportunities in the first half of 2003. over the same period, productivity growth receded while the average remuneration per worker rose at an estimated annualised rate of 10 per cent. as a result, nominal unit labour cost continued to increase at a rate above the upper limit of the inflation target band of 6 per cent. the decline in the rate of economic growth was due to a fall in the volume of exports, whereas domestic demand continued to increase strongly. the level of short - term interest rates seems to have had little effect on domestic demand. the rate of increase in domestic final demand declined only marginally from 4 per cent in 2002 to 3½ per cent in the first half of 2003. the annualised growth in real gross domestic expenditure nevertheless remained at 4½ per cent in the second half of 2002 and in the first half of 2003. growth in real household consumption expenditure slowed only slightly from an annualised rate of 3 per cent in the second half of 2002 to 2½ per cent in the first half of 2003. the sustained high growth in consumption expenditure was made possible by relatively strong increases in personal disposable income as well as by a rise in household debt. household disposable income benefited from higher salaries and wages, improved social transfers from government and income tax reductions. at the same time, the low level of the debt - to - income ratio of households and expectations of imminent reductions in interest rates encouraged some households to incur debt. real household consumption expenditure accordingly retained a large part of its earlier buoyancy at the cost of a significant increase in debt. the ratio of household debt to disposable income was nevertheless still relatively low at 53 per cent at the end of june 2003. the steadfast growth in household consumption expenditure was accompanied by an annualised increase in real government consumption expenditure varying from quarter to quarter between 3½ and 4 per cent throughout the past year. these growth levels have been maintained since the beginning of 2001 and signify the greater emphasis on service delivery in government ’ s fiscal strategy. the rate of increase in real fixed capital formation picked up during 2002

sharply, signalling that monetary policy was inadequate to address the severe economic contraction. apparently, chairman meyer ’ s reply was to enquire what demand deposits were, but, even after listening to fisher ’ s explanation, failed to show much interest. some of the members of the audience may be thinking that the choice of an anecdote reminding us that central bankers ignore monetary developments at their own risk is not too surprising in this house. in fact, this is certainly a main moral of this story, but this anecdote also points out to another important fact, namely that sound policies require good analyses, and – in turn – good analyses rely on high quality statistics. at the ecb, the use of statistics for our analysis and communication is pervasive. one just needs to listen to the introductory statement of the ecb president at the monthly press conference following the governing council meeting or read the ecb monthly bulletin to immediately realise how intensively we rely on statistical data. indeed, statistical data is a key input into the information set available for a number of important political decisions, from the regular setting of monetary policy to the assessment of the degree of convergence of countries wishing to join the euro area. it should be noted that, in this respect, there is nothing special about the ecb relative to other central banks. indeed, the use of statistics is equally important and pervasive for other major central banks. more generally, statistics are of crucial interest to a variety of economic agents in our economies. financial market participants, multinational corporations and citizens at large, are increasingly interested in improving their access to – and their understanding of – the existing statistics. globalisation creates additional demand for new and more comprehensive statistics. for instance, in a globalised world the need for monetary and economic analyses in real time requires comparable key macroeconomic statistics across major economic areas, as well as a few worldwide aggregates with appropriate regional breakdowns. let me just give you an illustration of the potential uses of such aggregates. as i hinted at earlier, it has been argued that globalisation has affected the inflation formation process, specifically by increasing the sensitivity of domestic price developments to foreign cyclical conditions ( the so - called “ global output gap hypothesis ” ). 6 this proposition has been accompanied by the recommendation – popularised by the economist and other important media – that central banks aiming to maintain price stability at home should pay close attention to developments in global output gaps. 7 however, the empirical evidence on this hypothesis is