From the macroeconomic point of view, the simultaneous action of weak inflationary pressures by the domestic economy, downward imported inflation and anchored inflation expectations led to low inflation rates. The domestic economic and monetary environment has put downward pressures on prices. Owing to the fragile aggregate demand, the negative output gap persisted, despite the growth recovery in the fourth quarter of 2013. Pressures  BIS central bankers’ speeches  1  from the labour market were subdued because of the rise in unemployment rate during 2013 and the moderate rise in wages. These developments led to a low increase of production cost and controlled businesses’ profit margins. The weak domestic demand narrowed the room for businesses to pass the increase in excise duty on the final prices. Also, the imported inflation has been downward, reflecting the low inflation in our trading partners and the stability of the exchange rate. Economic and financial agents show anchored inflation expectations, with no considerable deviation from either the objective of the Bank of Albania or the average historical behaviour. Analysing the economic performance, INSTAT data show that the gross domestic product increased by 1.1% during the fourth quarter of 2013, after a decrease by 2.5% in the third quarter of 2013. This increase was broadly determined by positive performance of domestic private demand, while the contribution of the public sector and net exports was negative. From the sectorial point of view, economic growth was generated by the positive performance of production, whereas services declined.

On an international scale, financial cooperation initiatives, such as the ASEAN Infrastructure Fund (AIF) would also complement domestic endeavors in channelling intraregional savings to needed projects. 8. This leads me to the second of the preparatory work, which is improving supportive framework for private financing. The Mekong river is made up of small tributaries flowing towards the same end to form a large fertile river. The benefits we receive from the confluence of these small tributaries as opposed to one waterway are incomparable. Likewise, strengthening domestic capital markets would help allocating available savings to the most productive use, thus, facilitating real sector’s economic activities and supporting economic growth. 9. A deep and liquid financial market could reduce business over-reliance on bank financing channel. On the other hand, it could also serve as a less-expensive alternative source of funds for local entities. The initial stepping stone towards a well-developed financial market is to improve the cross-country interconnectedness of local financial markets. Financial connectivity could be enhanced by linking capital and bond markets, creating regional exchange trading system, as well as developing a network of payment and settlement system. Another important step is to streamline rules and regulations to facilitate cross-border movement of capital. Such a process can be achieved through promoting flows of capital among member countries via reducing regulatory obstacles to stimulate foreign participation and outward investment. Currently, Thailand allows non-residents of ASEAN to issue both foreign currency-denominated and local currency bonds. The derivative market also serves investors to hedge against financial risks.