in 2021, after a challenging year with significant difficulties caused by measures to prevent the covid - 19 pandemic. preliminary estimates of kas suggest that the country ’ s economy in 2021 marked a real growth rate of 10. 5 %. significant impact on the growth of economic activity had the measures of movement relaxation, which greatly increased the visits of our diaspora in kosovo, visits which represent a very important source of funding for the country ’ s economy. the concept of transition elaborated by the ebrd report rightly argues that a well - functioning 1 / 2 bis central bankers'speeches market economy must be competitive, inclusive, well - governed, environmentally friendly, sustainable and integrated. we welcome the conclusions and recommendations from the transition report and consider them to be a good guide for kosovo ’ s economic perspective. the report pays special attention to digitalization, which is also transforming the financial system worldwide. we see the digital transformation process as an opportunity for financial institutions to become more efficient as well as improve access to financial services for households and businesses. in terms of payments, the cbk has taken some important steps in market liberalization, where payments and money transfer services are also allowed to be provided by non - bank financial institutions. the cbk plans to further liberalize the payment services market by adopting the eu payment services directive known as psd2, as well as two eu directives addressing payment accounts and electronic money, in under the new law on payment services. for the end, allow me to once again express my highest appreciation to the ebrd, which has consistently proven to be a very important supporter of kosovo ’ s economic development and promoter of structural reforms in the country ’ s economy. 2 / 2 bis central bankers'speeches

of deposits from households and non - financial corporations to accounts with financial institutions. this is probably related to rising prices and the resultant falling real incomes. with prices higher, it is increasingly difficult to form new savings. this development is likely to be particularly relevant for savings banks. institutions would therefore be well advised to act very prudently now, not to neglect adverse scenarios and to conduct sound risk management. if credit quality deteriorates, this should be reflected on balance sheets very quickly. at present, however, the german banking system is on a fairly sound footing, with a good buffer of surplus capital. the same is also true of the savings bank sector. savings banks have a clear buffer over and above supervisory requirements. they are therefore well equipped to weather bad times. 5 inflation and monetary policy developments in inflation over the past year have demonstrated just how quickly times can change. after decades in which inflation rates were quite predominantly low, even too low for a time, the inflation curve picked up significantly in the summer of 2021. this increase was initially thought to be temporary, but has continued month after month and has become increasingly broad based. in both the euro area and germany, the inflation rate has now exceeded 8 % since may ; in other words, it is more than four times higher than the target of 2 %. in august, the harmonised index of consumer prices for the euro area stood at 9. 1 %, with inflationary pressures broadly based. core inflation, which excludes energy and food, came to 4. 3 % in the euro area in august. the inflation forecasts for the next two years have likewise been raised to an average of 5. 5 % for 2023 and a still considerable 2. 3 % for 2024. the economic costs of such high inflation are severe – and they hit the most disadvantaged the hardest. the governing council of the ecb ( european central bank ) is determined to restore price stability. that is our remit, our mandate. we on the governing council of the ecb ( european central bank ) have therefore taken action. as at 1 july, net purchases under the long - running asset purchase programme ( app ( asset purchase programme ) ) were discontinued. in july, we raised key interest rates by 50 basis points, thereby closing the negative interest rate chapter. three weeks ago, we followed up with an even larger interest rate hike of 75 basis points. further interest rate increases are expected to follow over the next few monetary policy meetings as the