the increased demand for labour force from businesses. meanwhile labour shortages turned increasingly apparent. these factors led to the rapid and broad - based wage growth in the private sector, which recorded an average growth of almost 13 %. wage growth – at higher rates than inflation – sustained the expansion in both households'incomes and consumption. on the other hand, wage growth pushed up rapidly the production costs, by exerting pressure on final prices. also, year 2023 recorded improvements in the domestic and external balances of the economy. among them, i single out : the improvement in the external position of albania, as the country's current account deficit recorded an unprecedented fall of five percentage points. this deficit dropped to 0. 9 % of gdp over 2023, recording a historical minimum of posttransition period. in addition, the external debt of albania dropped below 50 % of gdp, while foreign direct investments marked a historical record of eur 1. 5 3 / 9 bis - central bankers'speeches billion. the good performance of albanian exports, climbing by eur 1. 7 billion over the past year, and the two - fold attractiveness of albania, both as tourism and investment destination, dictated this performance. in parallel, the international reserve of the bank of albania registered a historical record of eur 5. 8 billion, by significantly increasing the solvency of the country. the improvement of albania's fiscal position, reflected in both the reduced budget deficit and public debt, which dropped to the minimum levels of more than a decade, to 1. 4 % and 59. 2 % of gdp, respectively. the reduced public debt drives to increased fiscal spaces for reaction against potential shocks in the future, as well as decreases risk premiums and financing costs for all economic operators. the sustainability of the banking sector, reflected in the improved indicators of capitalization, profitability, as well as of the loan portfolio quality. the nonperforming loans ratio stood at 4. 8 %. these positive trends enable the banking sector to supply efficiently and in a continuous manner the economy with financial funds and payment and savings instruments. in parallel with these developments, inflation recorded a gradual decline, but steadily, over 2023. as at end of 2023, inflation dropped to 4 %, from 7. 4 % at the beginning of 2023, and to 2. 7 % in the first quarter of 2024. the decline in inflation in foreign markets, the exchange rate appreciation and the normalisation of the

gent sejko : speech - cesee meeting of finance ministers and central bank governors with the imf managing director speech by mr gent sejko, governor of the bank of albania, at cesee meeting of finance ministers and central bank governors with the imf managing director, ms. kristalina georgieva, virtual, 23 october 2020. * * * dear madame georgieva, mr. chairman, honorable ministers, fellow governors, after the severe economic and social stress caused by the covid - 19 pandemic, the global outlook appears to be improving. determined action from policymakers, coupled to initially successful efforts to contain the contagion, has sheltered economies and societies from the worst of the crisis and paved the way towards a nascent recovery in the future. nevertheless, policy challenges ahead are both multiple and complex. first, the recovery is surrounded by downside risks while policy space is getting increasingly scarce. second, the severe shock might lower potential growth across the globe. third, a potential reversal of trade and global supply chain integration might lead to policy fragmentation and pose additional headwinds for emerging economies. at the bank of albania, we believe a successful policy solution requires courage and flexibility at a national level, as well as coordination and cooperation at a regional and international one. i will try to briefly expand upon these points, while offering a regional and an albanian perspective. the spread of the pandemic threw the western balkans into a deep recession. production and incomes dropped sharply, unemployment rose, the balance sheets of the private and public sectors deteriorated, and societies at large were put under stress. estimates of the drop in gdp for 2020 range from – 3. 1 % ( the world bank ) to – 5. 2 % ( the imf ). across the region : central banks deployed both conventional monetary policy instruments ( policy rate cuts ) and unconventional ones ( ranging from qe type of operations to long term liquidity injections and credit support schemes ). in addition, they provided temporary macroprudential relief to encourage loan payment deferrals and loan restructuring. at the same time, fiscal policy turned expansionary. most governments applied large stimulus packages, comprising increased outlays for the health sector, tax relief, direct transfers and credit guarantee schemes. as a result, debt to gdp ratios are expected to increase by 10p. p. on average. albania shares a similar experience. in the wake of a double shock in the form of 2019 ’ s