. the first is that bh is going through so many transitions simultaneously that the economic numbers can move through very large ranges. second, the economic outlook depends crucially on an acceleration of the economic, regulatory and legal reform processes in bh. forecasts based on the status - quo as compared to those based on an accelerated reform path will be very different. in fact, unless the regulatory, legal and tax systems are changed, and changed quickly and substantially, bh will have a very difficult future. the environment for private investment has improved but it is still far too complicated. this applies to local as well as foreign investment. this is where the attention of bh politicians and international consultants and advisors needs to be directed. the macroeconomic situation in bh is a stable one. it is the areas of regulatory, tax and legal system reform that will determine the future of bh. i am an optimist and believe that we will see a combination of continued macro - economic stability and accelerated micro - economic and legal reform. on this basis, i would expect inflation to remain stable at around current levels, economic growth rates to be at least 6 - 7 percent per annum in nominal terms ( 5 % real ) and the balance of payments situation to gradually improve. there are still risks attached to investing in bh. but there are also many opportunities. though bh is a small country, it is very strategically located with free market access to a very large european market. it has a well educated labor force. given these two factors and the high degree of macro - economic stability in bh, i believe the balance between risk and opportunity now favors opportunity. i take your presence at this conference as a very encouraging sign for bh.

##s have played a key role in opening the eu payments market to innovation, providing a regulated environment for new entrants such as e - money and payment institutions to offer their services to consumers, further increasing competition and choice. 6 these pieces of legislation have created many opportunities for ntechs, and indeed traditional commercial banks, to create a wide range of new and innovative payment solutions and business models. to maintain trust in these new innovative offerings, a key priority for the central bank and industry must be to ensure the safety and integrity of the system to threats such as fraud. in this regard, the central bank has been engaging closely with industry to ensure the successful implementation of strong customer authentication ( sca ), a payments services directive ( psd2 ) mandate, aiming to strengthen resilience against fraud and make online payments more secure. while psd2 supported innovation in the payments market, in particular open banking, which offers bene ts to merchants and consumers, it has not yet reached its full potential as imperfections and barriers remain. the central bank will seek to ensure the advantages and full potential of psd2 are achieved and will continue to actively engage with our european colleagues in this area. the upcoming review of psd2 will be a key area of focus in this regard. impact of covid - 19 digitalisation and innovation had aligned with and supported changes and trends in consumer preferences and behaviour precovid - 19. the pandemic accelerated this trend, compressing years of digital transformation in the payments space into months with a surge in online transactions and contactless payments. in ireland, the value of point of sale transactions increased due to the pandemic, with june to october 2020 transactions some 17 per cent higher compared to the same months in 2019. 7 in terms of contactless payments, as the irish economy re - opened in large part in the third quarter of 2020, the volume of contactless payments increased by 36 per cent compared to the third quarter of 2019. 8 furthermore, the value of atm withdrawals for the june to october 2020 period was one third lower than a year previously. this changing behaviour is unlikely to fully reverse post pandemic. for example, survey evidence across seventeen eu countries shows that a vast majority of consumers expect to continue to use digital services as often as they do now or even more often. 9 however, while the pandemic has prompted a move away from cash for some, it likely remains the most common way of making small