in its latest report on monetary policy released in march, the bank of greece estimated that gdp would decline by around 2 % in the current year. given the present circumstances, this projection is surrounded by high uncertainty and is subject to high upside risks. 5. the recession spread across all sectors of activity in 2009, negatively impacted employment, and caused an increase in the rate of unemployment. total employment declined by 1. 1 %, the number of employees fell by 1. 6 % and the unemployment rate climbed to 9. 5 %. a further drop in employment is projected for 2010, while the rate of unemployment will come close to 11 %. 6. the adverse developments, mainly in greece ’ s fiscal aggregates, together with the blows to market confidence, ultimately took their toll on the banking system. whereas in many other countries the crisis first broke out in the financial system and from there spread to the real economy, in greece things worked the other way round. the greek banking system only began facing liquidity constraints when the severe fiscal imbalances led to successive downgradings of the country ’ s credit rating – and consequently the credit ratings of greek banks, thereby restricting their access to international capital markets. meanwhile, the slowdown in deposit growth, due inter alia to the recession, affected the domestic supply of credit. it is worth noting that, in spite of these problems, the annual rate of credit expansion to the private sector remained positive throughout 2009, contrary to the situation in the euro area as a whole, where there have also been periods of negative credit growth rates. the greek banking system showed remarkable resilience during the global crisis ; the provision of ample liquidity from the eurosystem at low cost was one of the reasons for this. for the banking sector, retaining this resilience in the future, especially in view of the gradual phasing - out of the extraordinary measures for the provision of liquidity, will be conditional upon dealing with the fiscal crisis, which affects its functioning, and restoring market confidence in the future of the economy. even after this happens, however, the new conditions that will emerge will be quite different from the ones in which the banks used to operate. the lessons drawn so far from the crisis will lead to a revision of the supervisory framework, now under examination by the basel committee. greek banks must therefore adapt to the new situation with insight, bearing these impending changes in mind. at the current stage it is imperative that they : • maintain size

development of domestic financial market, in particular, the government bond market. second, the need to increase the efficiency of domestic money market, which in turn benefits to enhance and to further strengthen banks ’ liquidity management. steps were also taken in the area of improving the capacity of financial institution, as well as improving financial market efficiency. banks are encouraged to strengthen their capital and compel to conduct best practices, especially in the area of risk management. on the other hand, we are also bounded to increase our supervisory capacity to ensure a prudent banking practice. years of strong commitment on reform has resulted in a resilient economic fundamental, at least, in the last five years. the economic growth accelerated to a 10 - year high. fiscal consolidation significantly reduces government debt, a proof of commitment of fiscal discipline. prudent macroeconomic management has also led to the declining trend of inflation and exchange rate volatility as well. in the financial sector, the banking sector is well capitalized and in a better balance sheet structure. strong macroeconomic fundamentals and resilient microeconomics structures lead to better risk perception, or a more accurate valuation from my point of view, as reflected by the recent rating upgrade. but to be frank, i feel that from the sovereign risk assessment, indonesia is still somewhat “ undervalued ”. it is perhaps that major rating agencies tend to be too conservative in assessing indonesia ’ s risk profile. this might possibly be a reflection of the “ traumatic ” view relate to the 1998 crisis. however, the recent update from some rating agencies has become a promising recognition into the fundamental transformation process in indonesia. following standard and poor ’ s, fitch, and moody ’ s, oecd has also upgraded indonesia ’ s country risk classification ranks from 5 to 4 on early april 2010. similar progress also came from the ranking upgrade of our global competitiveness index from 72 in 2003 to 54 recently. prospect and challenge ahead global recovery coupled with favorable risk perceptions support our optimism toward the outlook in 2010 and 2011. we are quite confident that the indonesian economy will grow at around 6. 0 % in 2010 and to 6. 0 – 6. 5 % range in 2011. this is mainly supported by the upturn on export and increasing investment. for the next periods, we expect that the economy will keep growing in an upward trend given the proven strong commitment from the government to implement reform measures on infrastructure projects and investment climate. on the later, it is important to