ardian fullani : recent economic and monetary developments in albania speech by mr ardian fullani, governor of the bank of albania, at the press conference on the monetary policy decision of the bank of albania supervisory council, tirana, 29 may 2012. * * * today, on 29 may 2012, the supervisory council of the bank of albania reviewed and approved the monthly monetary policy report. based on the analysis of albania ’ s latest economic and monetary developments, and following discussions on their performance outlook, the supervisory council of the bank of albania decided to keep the key interest rate unchanged at 4. 25 %. this decision reflects the supervisory council ’ s opinion that the actual monetary conditions are adequate to meet the bank of albania ’ s inflation target in the medium run. it holds the key interest rate at a record low, thereby maintaining the strong stimulating nature of monetary policy, in order to boost aggregate demand and economic growth. this decision also reflects the heightened uncertainty deriving from the external economic environment and, particularly, from the recent economic developments in greece. let me now proceed with an overview of the economic developments and key topics discussed at today ’ s meeting. * * * annual inflation marked 1. 6 % in april, continuing to pursue an upward trajectory over the last two months and approaching the lower limit of the target band. after marking a minimum low in february, the rising trend of inflation was expected and communicated by the bank of albania. it reflects, to a large extent, the gradually subsiding supply - side shocks on inflation. the decelerated rise in primary commodity prices in the global markets, the low inflation in albania ’ s trading partners and the stable exchange rate have generated reduced imported inflation rates. however, despite increasing, inflation remains low due to the incomplete utilisation of capacities in the economy, which is reflected in weak pressures on the rise of wages and producer prices. at the same time, economic agents ’ inflation expectations are low and growth of money is in line with the demand of the economy for money. in addition, the absent rise in regulated prices has contributed to the low inflation rate over 2012. while making an analysis of the economic developments, the supervisory council noted that the reappearance of stress in the global financial markets in the current month has heightened the uncertainties in these markets markedly, being translated into more strained financing conditions for the public and private sector. the fall of foreign demand and the higher perceived risk for the entire area have started to affect the performance of

ardian fullani : overview of albania ’ s recent economic and financial developments speech by mr ardian fullani, governor of the bank of albania, on the monetary policy decision - making of the bank of albania ’ s supervisory council, tirana, 27 june 2012. * * * today, on 27 june 2012, the supervisory council of the bank of albania reviewed and approved the monthly monetary policy report. based on the analysis of albania ’ s latest economic and monetary developments, and following discussions on their performance outlook, the supervisory council of the bank of albania decided to keep the key interest rate unchanged at 4. 25 %. the supervisory council deems that the monetary conditions are adequate to meet the inflation target in the period ahead, while they provide the needed monetary incentive to support the domestic demand. let me now proceed with an overview of the economic and monetary developments and key topics discussed at today ’ s meeting. * * * annual inflation marked 1. 9 % in may, continuing to pursue a gradual upward trajectory. inflation rate in may was largely driven by the rise in food prices, whose performance triggered inflation ’ s behaviour over the last two years. the impact of other commodities ’ basket on inflation remains stable and slightly volatile. within the macroeconomic context, the analysis of economic and financial developments reveals the lack of strong and sustainable inflationary pressures, which is reflected on the current low annual inflation rate. as aggregate demand increased below its potential, free production capacities were created in the economy, generating weak pressures on the increase in wages. imported inflation remains moderated, owing to the contained performance of core commodity prices, the moderated inflation in albania ’ s trade partner countries and the stable exchange rate. also, economic agents ’ inflation expectations remain low, administered prices provide a minimum effect, and monetary developments and liquidity in the economy are in line with the mid - term price stability. data available on the economic performance for the first five months of 2012 show that economic expansion slowed down. estimations based on indirect, qualitative and quantitative data reveal a sluggish production sector in the first quarter of 2012, whereas services improved compared to the fourth quarter of 2011. on the demand - side, economic developments in this period show a moderated foreign demand and a sluggish domestic demand. the latter is determined by the weak performance of private sector ’ s expenditures and investments, and the low fiscal stimulus. january – may 2012 is characterised by a consolidating behaviour of fiscal policy. budget deficit decreased