A positive development of year 2004 was also the agricultural production, which increased by 4.9 percent. The industry sector performance has been characterized by a mixed performance. Sub-branches of the processing industry like foodstuff industry, manufacturing of mineral products and metallurgy, performed higher sales during the nine-month period of 2004, while sales of the textile industry and processing leather industry marked rather low levels. The energetic sector experienced a positive performance during 2004. The electric energy production marked an annual growth of 12 percent, being expressed in the rise of exports by 20 percent and the decline of energy imports by 30 percent. Sales of the transport sector increased by 5 percent over the nine-month period of the year. An important aspect of the Albanian economy over the last years is the fact that the economic growth did not generate macroeconomic imbalances. On the contrary, it is accompanied by the ongoing consolidation of this stability, being expressed in the low and stable inflation rates, in the reduction of budget deficit and public debt, in the improvement of the balance of payments position and in the overall stability of monetary indicators.
I would be shirking my responsibilities if I did not explain to you the risks of failing to do so. Vague promises would not have been enough. Market reaction to rising sovereign debt can turn quickly from benign to malign, as we saw in the euro area earlier this year. It is not sensible to risk a damaging rise in long-term interest rates that would make investment and the cost of mortgages more expensive. The current plan is to reduce the deficit steadily over five years – a more gradual fiscal tightening than in some other countries. As a result of a failure to put such a plan in place sooner, some euro-area countries have found – to their cost – a much more rapid adjustment being forced upon them. Of course, no one can forecast the gusts – or indeed storms – the economy may face looking ahead. But if the recovery is slower than expected then the automatic fiscal stabilisers – the lower tax receipts and higher spending that result from weaker growth – will act to stimulate demand. And monetary policy can react too, especially when there is a credible plan to reduce the deficit. In the wake of the worst financial crisis ever, the amount of money in our economy – broad money – is now barely growing at all. It was the failure in the 1930s to halt a marked contraction in the money supply that led to the Great Depression.