The uncertainties due to commodity price fluctuations also stand out as an important issue for the monetary policy communication and expectations management by the central banks. Structure of the commodity price dynamics is also of great importance for they constitute an input for the monetary policy decisions of the central banks. For example, the sources of the commodity price fluctuations and the nature of the shocks are extremely influential for the determination of the policy responses to these fluctuations. Similarly, not only the level but also the volatility of commodity prices can have a significant effect on the macroeconomic activity. For example, a shock affecting the level of crude oil prices may have a different effect on economy, if it is observed in a period where the volatility of prices is also higher. BIS central bankers’ speeches  1  Inflation  IV  III  Growth  I  II  As I have briefly mentioned before, an increase in the commodity prices creates downward pressure on the growth prospects, and upward pressure on inflation. In Turkey, the investment incentive package that was announced yesterday will support our economic growth through the supply side, and the tighter monetary policy will eliminate the inflation risks. The sessions on each day of the conference will provide platforms for studies which are of very rich content and great potential benefit for policymakers. For example, macroeconomic effects of the commodity price dynamics and possible corresponding policy responses are among the main themes elaborated during the conference.
Jean-Pierre Roth: Are we still on the growth track? Summary of a speech by Mr Jean-Pierre Roth, Chairman of the Governing Board of the Swiss National Bank, at the General Meeting of the Schaffhausen Regional Association of Industry and Commerce, Stein am Rhein, 18 March 2005. The complete speech can be found in German on the Swiss National Bank’s website (www.snb.ch). *  *  *  After the economic downturn witnessed in the second half of 2004 and at the beginning of 2005, the question arises whether Switzerland will remain on the growth track. Jean-Pierre Roth believes it is and anticipates GDP growth to be in the range of 1.5% this year. Owing to the favourable international economic situation, the economy in Europe is likely to pick up again, which will also benefit the Swiss export industry. At the same time, we can assume that domestic demand will continue to grow at a moderate pace. The decline in important economic data during the last few months, however, suggests that economic growth in the first half of 2005 will remain weak. This notwithstanding, involves the risk of declining corporate and consumer confidence, which in turn would jeopardise economic development. It is also doubtful whether the weak dollar and high oil prices have already had their full impact or whether it is yet to unfold. Based on such considerations, the National Bank decided to leave the three-month Libor rate at 0.75% in mid-March.