Gent Sejko: Welcome remarks - 16th SEE Economic Research Workshop Welcome remarks by Mr Gent Sejko, Governor of the Bank of Albania, at the 16th SEE Economic Research Workshop, Tirana, 5 December 2022. *** Your Excellency Ambassador Huber, Dear guests and speakers from central banks, academia and research institutions, Dear colleagues, Welcome in the 16th South-Eastern European Economic Research Workshop. It is a great pleasure hosting this event in-person this year, as we hoped in the last workshop, even though only partially, after two years of holding its proceeds virtually. One lesson learned and adopted from the pandemic, in a broader dimension, was how to operate in a virtual environment and ensure that all our participants can be fully engaged in these proceedings-whether you're here in person or joining us virtually. I take this opportunity to extend my appreciation to all of you for your continuous dedication and precious contribution. I'm really grateful that this initiative, which has started 16 years ago, has grown and has taken such dimensions, by enforcing and extending over the years the cooperation between central bankers, academics and policymakers not only within the SEE region, but from all over the world. As in many prestigious central banks, even at the Bank of Albania, the economic research has an important role in its overall activity, by providing continuous support to both policy design and implementation processes through the novel and sophisticated empirical tools adopted for policy analysis and forecasting.

The vast body of research conducted in the area of monetary policy has documented the real risk of high and persistent inflation and inflationary expectations. It also shows that without a strong and committed monetary policy response, inflation expectations become self-fulfilling, leading to increased uncertainty, disrupted price signals, inefficient distribution of resources, reduction of economic growth and increased long term volatility. Our experience, research and current analysis, show that under current conditions, the only responsible policy for the central bank is to respond by increasing the policy rate and reinforcing its commitment to price stability. This course of action will create the necessary monetary conditions to control inflation and inflation expectations, and will eventually help return inflation to the target within a reasonable time horizon. Our commitment to price stability aims to preserve the purchasing power of the family incomes and the value of household savings; preserve financial stability and create optimal credit conditions; as well as help the private sector to make reliable business and sustainable investment plans. Most importantly, our projections, which benefit from the same models and research analysis, suggest that the current round of policy rate hikes will not be recessionary. The Albanian economy will continue to grow in the medium-term horizon. In this respect, the recent increase of policy rate which aims to preserve price stability and anchor inflation expectations, is simultaneously a measure for protecting the economy;  2/4  BIS - Central bankers' speeches  the private sector; and the households, from the negative effects of inflation.