requires greater contribution of the private sector to economic growth, hence bringing consumer and business behaviour to the forefront and accentuating the role of bank credit to their financing. setting proper equilibrium between short - term stimulus and long - term stability requires courage and diligence from the policy - makers. ongoing structural reforms remain a priority in the long run. the latter should aim at broadening the potential growth rate of albania and underpinning its macroeconomic sustainability. in what follows i will elaborate on these issues, beginning first with a brief overview of the recent developments in global economy. the recovery of global economic activity persisted in the second quarter of 2010, while indirect or preliminary data show more moderate growth rates in the third quarter. economic outlook remains highly uncertain due to the fiscal stimulus withdrawal and the private sector ’ s ( unsatisfactory ) soundness. growth in advanced economies and in our main trading partners was moderate due to the correction of private sector ’ s balance sheets, weak lending and labour market, and low consumer confidence. the low capacity utilization rate has yielded weak inflationary pressures at a global level. the financial markets continue to show high levels of volatility in response to the concerns over the economic outlook and the long - term sustainability of fiscal indicators. in political terms, maintaining macroeconomic co - ordination at a global level and keeping open channels of the movement of goods, capital and technology, are considered priority measures to avoid a second recession. this would certainly provide substantial contribution to the albanian economy, which remains a net borrower in the global market and that has benefited largely from the growth of demand and global trade in the form of higher exports in 2010. in light of these developments, and being largely affected by them, the albanian economy has grown progressively over the year. according to instat, gdp grew by 3. 3 % y - o - y in the second quarter of 2010, considerably higher than 2. 0 % in the first quarter the same year. this growth was mainly driven by foreign demand, while domestic demand performed at more stable rates. this performance was reflected in improved figures in industry, particularly in its exportrelated sub - branches. construction and services did not perform alike : the gradual recovery of domestic demand boosted further the activity in services. by contrast, the construction sector continues to suffer from the weak demand in the real estate market, the limited financial resources and structural concerns related to its regulation. subsequently, activity in the construction sector posted a high annual contraction rate in the second

in the months ahead. it is therefore preferable that we go ahead with this operation now, in an orderly fashion, despite the fact that the markets have regained a certain degree of optimism in the past few days – rather than at a later point under potentially more adverse conditions. the federal council and the swiss federal banking commission have been kept abreast of the preparations underway and our negotiations with ubs.