economy improved in 2023. in particular as following : 1 / 6 bis - central bankers'speeches first, the improvement in the external position of albania, reflected in a rapid fall of the current account deficit. this deficit dropped to 0. 9 % of gdp over 2023, recording a historical minimum of the post - transition period. also, external debt dropped below the level 50 % of gdp, while the level of foreign exchange reserves of the bank of albania grew, in turn improving our ability to respond to both domestic and external shocks. the increase by eur 1. 7 billion in the albanian exports over the past year, coupled with the immediate growth in foreign direct investments - which reached a new historical record of eur 1. 1 billion – led to these improvements. second, the improved fiscal position of albania, being reflected in the reduced budged deficit and public debt, at 1. 4 % and 58. 9 % of gdp, respectively, the minimum levels for more than a decade. the decreased public debt increases fiscal spaces for reaction against potential shocks in the future, as well as decreases risk premia and financing costs for all economic operators. third, the sustainability of the banking sector, being reflected in the improved indicators of capitalization, profitability, as well as of the loan portfolio quality. the non - performing loans ratio stood at 4. 8 %. these positive trends enable the banking sector to supply - efficiently and continuously - the albanian economy with financial funds as well as with payment and saving instruments. the albanian economy, in a longer - term perspective, has displayed an admirable degree of resilience and flexibility in face of the huge challenges experienced in recent years. among others, this fact was reflected in the improved risk ranking of the country's public debt by foreign rating agencies, now at bb -, according to standard & poors, as well as in the increased interest of international operators to invest in albania, both in real economy and financial market. honourable members of parliament, the positive development momentum of the country is attributable - first - to the resilience, flexibility and dynamism of the private sector. in addition, this positive developing momentum, reflects our prudential monetary policy, our supervisory, regulatory and macro - prudential measures, as well as the continuous work we have carried out for the advancement and modernization of payment systems. in more concrete terms, the prudential normalisation of the monetary policy stance, first enabled

to keep inflation under control and further its continuous reduction, at minimum costs on the economic activity and financial stability of albania. also, our rigorous micro and macro - prudential measures strengthened the stability of the banking system, while the continuous alignment of our regulations with the european union standards led to a considerable regulatory convergence, by reducing financial risk premia in albania. last, the ongoing advancement regarding the infrastructure and regulatory basis of payment systems has driven up financial inclusion and has helped efficiency and formalisation of private sector edging up. next, i will delineate in more concrete terms the main aspects of our work over the past year, by evidencing the undertaken measures and the achieved outcomes. monetary policy and price stability 2 / 6 bis - central bankers'speeches the monetary policy of the bank of albania has continued to be oriented towards the fulfilment of our legal objective : achieving and maintaining price stability. in this context, i would like to highlight that still high and above - target inflation rates dictated the continuation of a normalising monetary policy over 2023. nevertheless, we have tried to implement a more flexible monetary policy, aiming not to undermine the positive development trends of albania and by taking care to harmonize it with the financial developments and the fiscal policy stance. in this context, allow me to focus on two important conclusions : first, the normalisation pace of monetary policy slowed down over the course of 2023. in this year, we have increased the policy rate only twice, with a cumulative effect of 0. 5 percentage point. this slowdown reflected the exchange rate strengthening and the consolidation stance of fiscal policy. in more concrete terms, rapid lek appreciation helped in mitigating imported inflationary pressures, while fiscal consolidation helped in curbing domestic inflationary pressures. in particular, lek strengthening has been and continues to be one of the most prominent economic developments of this period by providing an entirely positive impact on the economy. it contributed to keep inflation under control, by enhancing the purchasing power of albanian households, as well as enabling a more gradual normalisation of our monetary policy stance, by keeping financing costs to businesses low. consequently, albania has one of the highest economic growth rates, the lowest inflation rate and the slowest increase in financing costs, across regional countries. second, the increase in policy rate engendered an overall hike in interest rates in the country, though the overall financing conditions in albania still remain simulating. in response to them coupled with the positive approach