The US sub-prime mortgage market, while small compared to the entire global financial system, could deliver a large impact on the back of US housing concerns, credit crunch and global liquidity squeeze. It made for a bad prognosis especially as last year’s growth momentum relied heavily on net exports. When all is said and done, however, the Thai economy managed to grow at the rate of 5.7 per cent for the fourth quarter and 4.8 per cent for the whole year. Government pump-priming contributed to this favorable growth outcome. But most importantly, it turned out that net exports contributed to almost 60 per cent of the overall GDP growth. Indeed, exports grew at a remarkable rate of 18 per cent in US dollar terms in 2007. The robust expansion was due  BIS Review 33/2008  1  to the ability of exporters to adjust through quality improvement and search of new markets. But exceptional export performance was due no less to healthy global growth, which translated into strong trading partners’ demand. Another factor that contributed to the success of exports was our ability to preserve overall price competitiveness in the face of sharp dollar decline. I will come back to this point in a few minutes. I would like to turn briefly now to economic stability. Monetary policy has been accommodative to growth since the beginning of 2007 with an aim to shore up domestic demand while keeping inflation in check.
Taking into account the available information, the Bank of Albania deems that, with 90% probability, the consumer price inflation is expected to range between 0.8–3.8%, after 12 months. This assessment takes into account our projections for the continued negative output gap, low pressures from global market prices, and anchored expectations of economic agents. Concluding, the Bank of Albania expects the inflationary pressures to remain weak in the medium run. *** At the end of the discussions, the Supervisory Council decided to keep the key interest rate unchanged at 3.75%. The Bank of Albania will continue to implement a stimulating monetary policy for as long as inflationary pressures will remain weak. Stimulating monetary conditions support aggregate demand growth and full utilisation of production capacities, creating, therefore, the premises for complying with the medium-term inflation target. 2  BIS central bankers’ speeches