extreme economic centralization and adherence with the principle of self - support. transition brought about a structural change in the principles of economic philosophy. the market forces took over the distribution of economic resources and the reduction of existing economic imbalances. this process resulted in increased unemployment, reduced output and consumption, while prices of consumption goods increased over 100 percent. foreign reserves disappeared almost instantly under the pressure of reduced output and drastic devaluation of domestic currency. meanwhile a relatively large and growing stock of foreign did not stop the declining trends. public confidence dived and many albanians emigrated mostly in neighboring countries. financial situation deteriorated at a fast pace as well. monetary policy as we know it was inexistent for albania did not have a modern central bank. early structural reforms focused on cutting the subsidies for insolvent state owned enterprises ; massive price liberalization ; privatization process ; land reform ; and provided the necessary incentives for the rapid macroeconomic consolidation of 1993 - 1995. during ‘ 90s albania ’ s path has been quite disordered scoring one of the most unique transitory experiences. it was an experiment a trail and error by everybody. it was a quest to understand and the role and position in this new market economy ; to rediscover the incentives of the private initiative and the risk that embodied in economic decision making. along this process albanian society established the foundations of the macroeconomic consolidations that started with the new millennium and accession to eu has scored significant progress. for a long period of time the economy has grown around 6 % percent annually, contributing to an upward trend of gdp per capita reaching around 2. 500 euro. inflation has been quite stable within our target band 2 - 4 % supported by responsible monetary and fiscal policies. further structural reforms improved the functioning of the market economy. privatization of big and medium enterprises, the privatization of former public banks, the modernization of legal framework and many other important reforms contributed to such impressive performance of albanian economy. in the last years i believe the country has made a substantial progress in its way towards european union. after wasting our chances during ‘ 90s i believe we are in the right track and personally i ’ m confident that the distance to our final destination, brussels is getting shorter day after day. the coming years are of a vital importance in adhering to eu as far as albania is preparing itself to move with its own feet. the current agreement with imf will finish at the end of 2008. i hope that acquis communautaire will become

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 march 2014. * * * today, on 27 march 2013, the supervisory council of the bank of albania reviewed and approved the monthly monetary policy report. given albania ’ s latest monetary and economic developments and discussions on their outlook, the supervisory council of the bank of albania decided to keep the key interest rate unchanged, at 2. 75 %. the council deems that inflationary pressures on the economy remain subdued. under these circumstances, the monetary policy will continue to be stimulating in the period ahead to provide the necessary conditions for compliance with our inflation target in the medium run. let me now proceed with an overview of economic developments and key issues discussed at today ’ s meeting. * * * annual inflation stood at 1. 9 % in february, slightly up from a month earlier. the increase resulted from higher prices of agricultural products, tariffs of potable water in some regions of the country, and vehicle insurance premiums. prices of other items of the consumer basket are stable and their inflation is low. new information obtained during the last month is limited. it does not alter our assessment that the overall economic and financial setting is characterised by low inflationary pressures. our projections have remained overall unchanged, but near - term downside risks are assessed as high. reflecting the weakness in aggregate demand, the output gap remains negative and the albanian economy is still characterised by incomplete utilisation of production capacities. the lower economic growth and poor performance of the employment index have led to weaker pressures on increasing wages and production costs. also, the sluggish aggregate demand keeps profit margins low. weak pressures from production costs and downward inflation expectations were the main drivers lowering core and headline inflation rates. in parallel, imported inflation was contained due to low inflation rates internationally and the exchange rate stability. this situation is expected to continue in the quarters ahead. the macroeconomic analysis, updated with information for the first two months of the year, suggests low economic growth during this period. private investments and consumption remained weak because of the low confidence of economic agents, slowdown of disposable income, tight lending terms, and presence of spare production capacities. trade deficit expanded 3. 6 % in january, primarily as a result of declining exports, in contrast to a month earlier, when it