During this period, the Albanian economy experienced some shocks on the supply side, with structural movements in the domestic financial markets, and a slowed domestic and foreign demand. These developments drove the fall in GDP in the first quarter of 2012 and made difficult the implementation of stabilising policies on the aggregate demand. The Albanian economy is expected to record positive growth rates as tensions may be reduced in the second half of 2012. Average annual inflation marked 1.9% in the second quarter of 2012, increasing by 0.8 percentage point compared to the first quarter of 2012. The gradual rise in consumer prices has mainly reflected the increase in unprocessed food prices, whereas prices of processed foods and those of non-food consumer goods lowered their contribution to inflation during the second quarter of 2012. The other categories in consumer prices basket showed a serene performance, and were characterised by low inflation rates. Within the macroeconomic context, consumer prices continue to reflect weak inflationary pressures, both on the supply and demand sides. On the demand side, the presence of free capacities in using the production factors is reflected in the costs control in economy and in declining pressures on inflation. On the supply side, the slowdown of imported inflationary pressures, decrease in oil and basic materials prices, steady administered prices, low inflationary expectations and minimal second-round effects did not generate inflationary pressures. Consumer price inflation remains at low rates and is expected to maintain the same rate in the period ahead.

Ardian Fullani: Overview of Albania’s latest monetary and economic developments and outlook Speech by Mr Ardian Fullani, Governor of the Bank of Albania, on the Monetary Policy Decision of the Bank of Albania’s Supervisory Council, Tirana, 30 April 2014. *  *  *  Today, on April 30, 2014, the Supervisory Council of the Bank of Albania considered and approved the Quarterly Monetary Policy Report. Given Albania’s latest monetary and economic developments and discussions on their outlook, the Supervisory Council of the Bank of Albania decided to keep the main interest rate unchanged, at 2.75%. The Council deems that inflationary pressures on the economy remain subdued. Under these circumstances, the monetary policy will continue to be stimulating in the period ahead, which will provide the necessary monetary conditions for compliance with our inflation target in the medium run. Let me now proceed with an overview of economic developments and key issues discussed at today’s meeting. Data for the first quarter of 2014 are generally in line with our previous assessments of the Albanian economy and financial situation. Weak aggregate demand continues to characterise the economy, further impacting almost all the economic and financial parameters in the country. In response to the weak aggregate demand, economic growth remains low and the Albanian economy continues to operate below its potential. The spare production capacities, both in the labour and capital markets, are reflected in low increase of employment and production costs, followed by weak inflationary pressures.