Indeed the way finance sector output is measured meant that the rate of bank balance sheet expansion translated directly into the measured contribution of the finance sector to productivity growth. Strong pre-crisis growth in manufacturing productivity, meanwhile, was largely caused by structural changes in the sector catalysed by globalisation. Increased competition from abroad, especially from China, created a more challenging climate for UK manufacturers, incentivising them to raise productivity (often supported by significant foreign direct investment) or scale back production. The UK manufacturing sector is now much more productive as a result – but is also smaller. Looking ahead, the risks to productivity from this channel also appear to be to the downside. The tensions between the US and China have led to increased tariffs which have contributed to a slowdown in world growth and a sharp slowing in goods trade. And in the UK, Brexit, on our forecast assumptions, is likely to lead to a reduction in the UK’s integration with the EU in goods and services trade, which appears unlikely, at least in the near term, to be offset by an equivalent increase in integration with the rest of the world. Putting all this together leaves me a little more pessimistic on productivity growth than the MPC’s central forecast. Since productivity growth is a key determinant of how fast the economy can sustainably grow – what I just described as the economy’s “speed limit” – that also means that, all else equal, I am a little more pessimistic about future GDP growth.

We have supported the European integration process of Albania through the continuous dialogue process with our European partners and by continuing the alignment of the banking legislation with Acquis Communautaire; the Bank of Albania has supplied the Albanian economy with qualitative coins and banknotes; we have intensified the efforts for the financial education of public and expansion of financial inclusion; we have managed the international reserves in compliance with the best principles of the field; the Bank of Albania has contributed in the economic dialogue through advises, publications and scientific conferences; and we have further developed and expanded the gamma of the financial statistics. Last, further progress has been achieved for the improvement of the institution governance, through the update of risk management systems and for ensuring the business continuity. In view of the organised cyber-attacks the country faced with in 2022, the Bank of Albania has paid special attention to enhancing the sustainability of banking system, financial markets and payment systems operated by the Bank of Albania, by collaborating with specialised national agencies and international partners. Honourable Members of Parliament, Meeting our mission and legal duties, realising the commitments in view of the mediumterm development strategy, and complying with the recommendations left by the Parliament of Albania for 2022, have been important objectives guiding the activity of the Bank of Albania throughout 2022. This philosophy will continue to lead our work in 2023 onwards. Concluding, allow me to re-emphasise that price stability has been and remains the main mission of the Bank of Albania.