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, 27 august 2014. * * * today, on 27 august 2014, the supervisory council of the bank of albania reviewed and approved the monthly monetary policy report. after discussions on the recent economic and monetary developments in albania, and their future course, the supervisory council of the bank of albania decided to keep the key interest rate unchanged, at 2. 50 %. the supervisory council deems that the current monetary conditions are adequate to ensure the return of inflation to target in the medium term. let me now proceed with an overview of the economic developments and key issues discussed at today ’ s meeting. * * * after falling in the previous three months, annual inflation picked up in july, standing at 1. 8 %. as in the previous months, annual inflation continued to be determined by the performance of food prices, especially seasonal fresh food. other cpi items continued to provide low and steady contribution to the increase of inflation. from the macroeconomic perspective, prices continue to be determined by low inflationary pressures, from both the demand and supply side. below - potential economic growth and the negative output gap exerted contained pressures on prices. imported inflation was also moderate and downward, due to low inflation in our trading partners ’ economies and the steady exchange rate. inflation expectations remain low, and monetary expansion is in line with moderate price rises in the medium term. new data on the real sector analysed in the last meeting are scarce. signals from indirect indicators corroborate our previous assessments for a faster economic growth in the second quarter, in line with forecasts for a gradual recovery throughout the year. during the period, the positive performance of private domestic demand was driven by the more favourable lending standards and the enhanced confidence of both businesses and households. at the same time, foreign demand for goods and services continued to grow, but the increase in imports due to the recovery of consumption and investment has weakened its contribution to economic growth. exports and imports of goods continued to grow, by 9. 2 % and 10. 4 %, respectively, in annual terms during the second quarter, and the trade deficit by 11. 6 %. as expected, the consolidating fiscal policy conditioned the drop of public sector demand and its direct negative contribution to aggregate demand. the consolidation

ardian fullani : key policy issues for remittances in transition economies - a view point from a recipient country speech by mr ardian fullani, governor of the bank of albania, at the high level conference organised by the ebrd and sponsored by switzerland, london, 28 september 2005. * * * remittances these days can easily classify as one of the most important sources of finance assisting the convergence of developing nations, to the point of overshadowing conventional funding like bank credit. the flow of remittances worldwide goes beyond 100 billion usd per year, with developing countries being recipients of more than 60 percent of this considerable amount. remittances ’ estimations in these countries often exceed trade inflows, or foreign financing and investment. therefore, they have become an important device for channelling funds and resources from developed countries toward countries in need. moreover, remittances, like foreign direct investments ( fdi ), are regarded as very stable and safe capital flow, helping developing countries to achieve sustainable high growth rates. in recent years, we have seen a growing awareness about emigrants ’ remittances as an important financial source for development. this issue was included in the g8 meeting agenda of 2004 and in the spring meeting of imf and world bank earlier this year, emphasizing the growing significance of migration, and with it, of migrants ’ remittances, calling for intensification of efforts to improve and identify their causes, as well as to establish an environment that could enhance the impact of remittances on development process. let me briefly give you our ( albanian ) experience with remittances and some suggestions to improve their ingress and effectiveness in the economy. during 90s, albania experienced a massive migration movement abroad, which soon became a crucial financial source for the new market economy. according to some studies ( barjaba, 2004 ; instat, 2002 ; kule et al, 2002, 2002 ), since 1990, nearly 800, 000 albanians may have left the country either permanently or temporarily. some more recent estimations show that the number of albanians living abroad may have reached 1 million. this is a considerable figure for a small country like albania with just 3 million of inhabitants. as a result, exodus phenomenon has attracted a great deal of attention in political and economic circles. remittances role in the economy has grown considerably over time. we can appreciate their weight easier if we put them against some