gent sejko : albania's economic and financial developments in 2019 speech by mr gent sejko, governor of the bank of albania, during the presentation of the annual report of the bank of albania for 2019 in the albanian parliament, tirana, 2 july 2020. * * * honorable mr. speaker of the assembly, distinguished ladies and gentlemen, let me thank you for the invitation and the opportunity you have given me to present to you the annual report of the bank of albania for 2019. in general, i find that the work of the bank of albania has had a positive contribution to strengthening the monetary and financial stability of the country. this stability is a necessary precondition for the sustainable and long - term development of the country. also, the bank of albania has fulfilled its other legal duties, has made progress in the implementation of the medium term development strategy, and has implemented the recommendations left by the albanian parliament. * * * in accordance with the legal framework in force, the main objective of the work of the bank of albania is to achieve and maintain price stability. 1. albanian economy and monetary policy during 2019 2019 was a challenging year for the albanian economy. economic activity continued to benefit from rising private consumption and the rapid expansion of tourism. however, the foreign environment proved to be unfavorable, while the decline in electricity production, the gradual termination of investments in major energy projects, and the november earthquake had strong negative effects. as a result, the economic growth of 2019 resulted in the level of 2. 2 %, down from the level of 4. 1 % recorded in the previous year. the shocks we suffered slowed down the growth rate, but did not divert the albanian economy from the positive development trend. this performance was reflected in the reduction of the unemployment rate, in the increase of employment and wages, as well as in the reduction of the foreign debt and the public debt of the country. in parallel, the main indicators of the health of the banking sector remained at satisfactory levels. the average inflation of 2019 resulted in the level of 1. 4 %. the performance still below the inflation target, required the maintenance of the stimulative direction of monetary policy during 2019. for this reason, the bank of albania kept the key interest rate unchanged at 1. 0 %, oriented the market on maintaining the easing direction of monetary policy in medium - term horizon, as well as supplied banks with the necessary liquidity. in response to our monetary policy, financial

high levels, which is worth for an in - depth analysis. the world bank survey conducted in 2016 concluded that the reasons for the limited use of the banking channels are the high costs on money transfers and the perceived cumbersome and complex procedures. to illustrate my point, according to this survey, the costs of remittances toward albania are estimated at 9. 4 per cent of the amount sent, compared to the 7. 2 per cent average in the region. we are all aware that the more financial channels are used, the more finances penetrate in the economy. moreover, the increase in the use of financial channels contributes to enhancing financial inclusion, increasing the opportunities for savings and productive investments. taking into account the benefits from the formal penetration of remittances in the economy and the insofar contribution to the banking and financial sector, the bank of albania suggests added 1 / 2 bis central bankers'speeches attention with regard to reducing transfer costs and improving or designing afresh products and services / targeted to this segment of the population. from its side, the bank of albania is engaged to further modernise the payment system infrastructure and align the legislation to the eu directives for an open, barrier - less, and competitive market. in the last two years, the bank of albania has been engaging in concrete projects with the world bank, related to remittances and financial inclusion. the first project consists in an assessment of the compliance with the “ general principles for international remittance services ” designed by the world bank and the bank for international settlement and a concrete action plan, with many stakeholders involved, to comply with those fields that need further improvement. another noteworthy project is the greenback of the world bank dedicated to remittances, implemented in several countries across the world. this project comes now to albania as a receiver of remittance and aims at enhancing the efficiencies in the market for remittances and raising the awareness and financial education, and has bank of albania ’ s endorsement until its completion. the other project consists in assessing the compliance with the criteria set out in the framework of the “ payment aspects of financial inclusion ”. by complying with the criteria from the involved stakeholders, it aims to increase the number of households and enterprises ( mainly the small ones ) that have a bank account or a payments account to conduct various transactions. in addition to the above, for a broader review of the remittances across all its dimensions, the bank of albania