asset price boom has turned into a bust, the effect on the macroeconomic policy settings is profound. partly this is because the contracting economy affects the policy settings, and partly it is because policymakers are quick to adjust their levers in an attempt to head off the contraction. again, a comparison with the us makes the point. on fiscal policy, the australian budgetary position has varied little over recent years, with predominantly small surpluses being the order of the day. in contrast, the us budgetary position has moved from a surplus of 2 per cent of gdp in 2000 to an expected deficit of 4 per cent of gdp in 2003. the us has used a huge amount of its fiscal ammunition, while we have not even started to do so. terms of trade march 1982 = 100 index index source : abs national budget balance per cent of gdp % % us australia - 2 - 2 - 4 - 4 - 6 official short - term interest rates % % australia on monetary policy, the contrast between the two countries is equally pronounced. the us put us interest rates up slightly more than we did in 1999 / 2000, but the difference was minor. however, since the us recession hit in 2001, they have reduced their interest rates much more than us. from a peak in the second half of 2000, sources : federal reserve bank of new york ; rba they have come down by 5½ percentage points, while we have come down in net terms by 1½ percentage points. i do not want to give the impression that i think stability of interest rates is a goal in its own right - only that it reflects the greater stability of the australian economy. - 6 sources : commonwealth treasury ; thomson financial datastream again, the contrast in both of the above policy variables between the two countries is as great as the contrast in the other variables i showed earlier, with australia again representing stability and the us instability. equally importantly, stability was not pushed at the price of lower growth : to the contrary, the australian economy has grown faster than the us, not just over the past few years, but over the past decade. this, of course, has been the main point of my presentation this evening. the other point, i hope that has come out, is that the really large examples of instability in recent decades have emanated from a species of financial event - namely, an asset price boom and bust - rather than from the normal cyclical fluctuations we are all familiar with under the heading of the business cycle

gent sejko : seventh review of the arrangement with the imf concluded speech by mr gent sejko, governor of the bank of albania, at the joint press conference with the imf mission and the minister of finance, tirana, 22 march 2016. * * * in accordance with the agreed agenda, during the last two weeks, we have held intensive talks with the imf mission, which focused on the review of the arrangement with the imf. also, in the framework of article iv discussions, talks focused on identifying those structural problems that hamper economic development in albania. the review concluded that economic indicators and macro - economic policies have been in line with our projections and commitments, despite the challenges facing the albanian economy during this period. moreover, article iv discussions noted the need for accelerating structural reforms, which should pave the way for faster and steadier development. let me now present a summarized opinion of the bank of albania on the country ’ s economic performance and the policies we have implemented and should continue to implement in the future. the albanian economy continues to be on a positive development trajectory. economic growth accelerated during 2015, driven by the expansion of investments and improvement of the balance of trade with abroad. private consumption showed signs of recovery in the second half of the year, whereas public consumption remained limited, in accordance with the fiscal consolidation strategy. during this period, economic activity expanded, among others, thanks to the monetary policy and supervisory and regulatory measures by the bank of albania. our accommodative monetary policy stance has contributed to lowering interest rates further down, mitigating liquidity pressures and maintaining the confidence of financial markets in price stability. in parallel, our supervisory and regulatory measures have contributed to reducing non - performing loans and improving the financial soundness of the banking sector. these developments are a prerequisite for sustainable crediting to the economy in the future. inflation remains at low levels, below our target. this performance has reflected the unutilized production capacities in the albanian economy, and the disinflationary tendencies arising from trade exchanges with abroad. in particular, over the first two months of 2016, inflation dropped, descending to 0. 2 % in february. our analyses suggest that it dropped due to external factors, namely the pronounced fall in food and oil prices in global markets. as such, the rapid drop in inflation and its low levels represent a supply shock to the albanian economy, rather than a disinflationary situation, which