As a monetary, supervisory and regulatory authority of the banking sector, in recent years, the 1/4  BIS central bankers' speeches  Bank of Albania has focused on addressing challenges introduced by the crisis. Let me present a brief overview. First, due to aggregate demand slowdown and exchange rate depreciation, the financial situation of households and enterprises worsened; hence non-performing loans rose rapidly and credit supply contracted. Among other things, the rise in non-performing loans pointed to the need for comprehensive improvement of the legal and regulatory environment, especially with regard to the execution of collateral. Against this backdrop, in cooperation with other public agencies, the Bank of Albania compiled and implemented a detailed programme of measures, which addressed thoroughly the identified inadequacies. As a result, the level of non-performing loans dropped rapidly and credit supply improved. This action also created adequate conditions for its growth to gradually pick up the pace. Second, following the introduction of stricter regulatory requirements on banking activity in the European Union, foreign banks reduced their exposure to both regional economies and Albania. Known also as deleveraging, this effect showed that higher integration of the banking sector exposes us to monetary policies and regulatory requirements applied in home countries. In response, the Bank of Albania has worked towards aligning our domestic supervisory and regulatory framework with European Union standards. We have implemented, in this regard, a new macro-prudential strategy, after the model of the European System of Central Banks.

Various investment activity and business sentiment indicators show mixed dynamics. In particular, new (especially, export) order expectations in industry remain low. This reflects a slowdown in global economic growth, continuing global trade tensions and geopolitical risks. These are all restraining factors for our economy. Regarding the three-year forecast horizon, our expectations here have not changed overall since October. We expect that the GDP growth rate will gradually increase to 1.5–2.0% in 2020 and to 2–3% in 2022. Successful implementation of national projects should provide the largest contribution to the increase in growth rates. This will support internal demand while external conditions remain a factor of uncertainty in the forecast. As regards oil prices. Last week, the OPEC+ countries reached a deal to extend oil production cuts until the end of March 2020.As of now, we stick to a conservative assumption for oil prices in our forecast: their reduction to 55 US dollars per barrel in 2020 and to 50 US dollars per barrel in 2021 and further on. We will adjust this opinion depending on, among other factors, future changes in the OPEC+ agreements and global demand for energy commodities. As to the balance of payments, we have slightly adjusted some indicators for this year, taking into account the actual data available. Let me remind you that the current account balance will 2/3  BIS central bankers' speeches  gradually decrease over the forecast horizon remaining sustainably positive: approximately to 3% of GDP in 2020 and to 1–2% of GDP in 2021.