2.2 On compliance with OBL requirements As noted in the accompanying explanatory notes, the Bank of Albania finds that the draft-budget 2017 complies with the legal requirements laid down in the OBL. 2/5  BIS central bankers' speeches  Thus, beyond the reduction of the public debt: - The expected nominal GDP is within the International Monetary Fund projections, detailed in the last publication of the World Economic Outlook. - The projected level of capital expenditure is higher than the programmed level of public borrowing; - The draft-budget 2017 envisages a contingency of funds equal to 0.9% of total expenditures (ALL 4 billion), to offset adverse effects from the exchange rate and interest rate volatility on the level of public debt; - The draft-budget 2017 does not envisage revenues from privatisations. 2.3. On public finance stability The Bank of Albania deems that the programmed reduction of public debt is a positive step toward enhancing the fiscal stability and reducing the weaknesses that arise from the still-high level of public debt. Also, the OBL sets out certain legal requirements, which: - require the progressive reduction of the public debt during each fiscal year; - anchor the macroeconomic framework to IMF projections; and, - limit the concentration of the budget deficit in certain periods of electoral years, These requirements help to discipline the fiscal policy, improve public finance stability, and enhance the interest of investors, both domestically and internationally, in Albanian debt instruments. 3.
What is more, the Swiss franc has only seen a moderate rise against the euro. As Swiss households and companies are on a solid financial footing, they are shielded – so to speak – against a tightening in credit conditions. Lastly, the stronger Swiss franc vis-à-vis the US dollar has limited the impact of higher commodity prices. Several other factors, like a robust labour market and a competitive industrial sector, could cushion the negative repercussions of the financial crisis in Switzerland. Against this backdrop, the SNB is expecting real GDP to grow between 1.5% and 2% this year. Inflation should be below the 2% mark again in the course of 2008. These forecasts still involve substantial uncertainties. Given the present state of the economy, the current interest level seems to be appropriate. However, the SNB will keep a close eye on further economic developments and inflation so that it is able to identify when action needs to be taken and react in a quick and flexible manner. BIS Review 51/2008  1