investments are encouraging for a steady economic growth, and testify to the increasing competitiveness and attractiveness of the albanian economy. the effects of economic growth have begun to be present in almost all economic and financial 1 / 5 bis central bankers'speeches indicators. participation in the labour force and employment has increased, the unemployment rate decreased to 12. 4 % in 2018 q2, and wages have started to trend upward. also, the growth in aggregate demand has contributed to the improvement of balance sheets of albanian enterprises and has enabled a clearly downward trend in non - performing loans ( npl ). the npl ratio dropped to 12. 9 % in 2018 q3, almost halved from its peak recorded in the wake of the crisis. reflecting its performance and the recovery of economic activity, against the backdrop of low interest rates triggered by our accommodative monetary policy stance, the albanian banking sector remains liquid, profitable, and well capitalised. this sector appears resilient to potential shocks and has adequate capital and liquidity to cover the needs of the economy for financing. the currently positive momentum of the albanian economy has created adequate premises for the growth trend to continue in the period ahead. the expansion of aggregate demand, the favourable financial environment, the improvement of balance sheets, and the restoration of confidence in the economy form a virtuous circle, which will support growth in the medium - term horizon. furthermore, the long series of structural reforms – whether already undertaken or being currently implemented – should pave the way for faster, sustainable and comprehensive economic growth. * * * dear ladies and gentlemen, the topic of today ’ s conference is related with the challenges that policy makers face in terms of growth as well as of economic and financial stability. from a general perspective, these challenges pertain to : implications arising from the monetary policy normalisation in major central banks on developing countries, especially those that have adopted the short - term debt as their growth model ; populist phenomena, which fuel a protectionist rhetoric, are detrimental to global trade, and refrain the free movement of production factors ; and risks that remain present in the global financial system. from a more specific perspective, today ’ s economic, monetary and financial reality appears especially challenging for the monetary policy. this reality is labelled as the new “ normal ” of the monetary policy. let me identify a few of these challenges. the natural interest rates appear downward, potentially as a result of a combination of several factors : slowdown of productivity and of

gent sejko : welcome address - annual conference of the bank of albania welcome address by mr gent sejko, governor of the bank of albania, at the annual conference of the bank of albania, tirana, 1 november 2018. * * * your excellency prime minister, your excellency minister of finance, dear professor berglof, dear governors and deputy governors, your excellencies, ambassadors, dear professors and representatives of the banking system, dear ladies and gentlemen, it is always a pleasure for me, as the governor of the bank of albania, to have the opportunity to open the proceedings of our annual conference. this year we are organising it in cooperation with the london school of economics and political science ( lse ), one of the foremost academic institutions in the field of research on economic and political sciences. the lse ’ s interest and the professional investment testifies that the cycle of our conferences has matured. i am sure that this year ’ s conference will uphold and even forge ahead the frontiers of our standards. engaging in open discussions and sharing our experiences will eventually help us to identify the optimum way for addressing the challenges that lie ahead. * * * this year ’ s theme is especially important not only to central banks but also to all the decisionmakers for the economy. while focusing on the direct implications for the monetary policy, it touches on issues that address strong and dynamic changes that economic structures, financial markets, doctrines of economic management, and societies and human communities are experiencing at the local and global level. recent reports by prestigious international financial institutions point out that the prospects of economic development remain positive. likewise, albania is set on a steady positive trajectory of economic growth. our prudent economic policies, the constant improvement of balance sheets in the real and financial sectors, and the ongoing restructuring of the economy and of the growth model have created adequate premises for an increasingly fuller utilisation of production capacities and the convergence of inflation toward the target. let me explain this in greater detail. according to official statistics, economic growth in albania accelerated to 4. 4 % in 2018 h1, showing a broad base in terms of aggregate demand components, and a diverse composition in terms of sectors contributing to growth. in particular, albanian exports showed growth, while the level of foreign direct investments remained high, contributing to the narrowing of the current account deficit and the stability of the external position. the dynamism of the exporting sector and the high level of foreign