annual terms, due to some balance sheet adjustments in individual banks, poor performance of lending to households and contraction in corporate lending. new available information keeps our baseline projections for the economic outlook unchanged. the albanian economy is expected to record low and positive growth rates, albeit substantially below potential. in the absence of room for stable fiscal stimulus, the growth of aggregate demand in the short - term period is expected to be driven by the external demand. in the long run, the magnitude of economic growth will be determined by the performance of consumption and private investments. below - potential growth will give rise to weak demand - side inflationary pressures. supply - side pressures will also be subdued in the period ahead. in the absence of unexpected supply - side shocks, annual inflation is expected to be low in the quarters ahead. at the end of discussions, the supervisory council decided to keep the key interest rate unchanged, at 3. 5 %. the council notes that the current monetary conditions are appropriate to ensure our inflation target is met in the medium - term period, providing at the same time proper monetary stimulus to recover private demand. in particular, the rapid drop in the yields over the past month reflects the low key interest rate, low inflation expectations and the reduced government borrowing from the domestic markets. the drop in the yields, in turn, provides room for lower rates on private sector credit. the projection of a similar setting for the future would allow better monetary policy transmission to the economy. bis central bankers ’ speeches

however, as our economy grows and current agreement ends at 2009, we will soon get full ownership of our economic policies with a reduced role of imf under article 4 of the agreement. the bank of albania has a proven track record of competence, credibility and professionalism in the service of our economy. these three elements provide necessary conditions to support and guarantee achievement of economic goal of stable prices and boost credibility in albanian economy ; but, we can not be hold responsible for the behavior of the other players. i am convinced that we need to find and implement clear domestic and foreign anchors to preserve the credibility of our reforms in the future. for the way ahead we are focusing our efforts in the identification and utilization of key elements of the state, politics, markets, institutions and general public that could efficiently play the role of domestic anchors. as part of this preemptive action, the bank of albania is carefully considering the possibility to launch a fully fledged inflation targeting regime of monetary policy in the midterm. this will be a conditional decision based upon results of current ongoing research, evaluation of the preconditions and building up of capacities. other possible anchors such as a memorandum of understanding with ministry of finance and public education are considered as well. on the foreign side we see numerous prestigious partners which understand our concerns and appreciate the value of fiscal discipline. they enjoy the power and the virtues of an influential voice. some of them have already been partners in reforms and will be shaping the future ones. european integration process and the association and stabilization agreement that we just signed in provides nominal anchors. in addition, sovereign ratings and other independent country reports could also play this role. the bank of albania intends to establish open lines of communication and adopts instruments that will automatically start building up pressures before it is too late. my personal conviction is that european accession lies out as a natural process, where central banks have a vital role to play. this approach would be of mutual benefit and it will speed up the convergence toward european standards, making the political decision a natural outcome of our efforts. to make this process more effective the central banks and the european institutions should continue the dialogue, why not even by surveillance, supporting, assisting and guiding us in fundamentals and economic financial and legal, infrastructure. this process would increase our responsibility and accountability to make albania an eligible partner. let me conclude my discussion quoting euripides who says : “ much effort, much prosperity ”. thank you again.