ukraine and the imposed sanctions, triggered an unprecedented supply - side shock. the upsurge in the prices of food, oil, energy and commodities in global markets, were reflected by a progressive rise of inflation in albania, as it reached at 8. 1 % in september. our analysis suggests that the initial external shock has started to spillover on the production cost structure and future expectations of market operators, risking to become a persistent inflationary period. the bank of albania deems that the main risk to the stable and long - term growth, in albania, is the expansion and strength of inflationary pressures. a high and persistent level of inflation threatens the domestic economic and financial stability, which remains a necessary precondition to the economic and social development. in the same vein, this type of inflation reduces long - term investments, disproportionally hits the lowest income earners, increases uncertainty among households and enterprises, and damages social cohesion. as a result, undertaking measures that guarantee price stability in the shortest time and at the most reasonable cost possible, should be the current priority of economic policies. consequently, the bank of albania has started the normalisation of the monetary policy stance, by gradually raising the policy rate and by expressing our willingness to continue this process until the monetary and financial conditions become adequate to maintain our inflation target. however, global theory and practice show that economic policies have greater efficiency when they are consistent and coherent. under these circumstances, the bank of albania commends the fiscal consolidation engagement, which is also the main message of the 2023 draft budget. overall, fiscal consolidation looks like a reduced budget deficit - from 3. 3 % of gdp expected in 2022, to 2. 6 % of gdp in 2023 ; and an improved primary balance - from a deficit of 1. 3 % of gdp expected in 2022, to a surplus of 0. 2 % of gdp in 2023. the bank of albania deems that this consolidation will impact positively the domestic economy and its financial markets. first, it signals the willingness of the albanian government to safeguard the longterm soundness of public finances, by increasing their credibility for domestic and foreign investors and controlling the long - term costs of public debt financing. second, fiscal consolidation reduces the need of the public sector to borrow in the domestic financial market, by easing the private sector's financing costs. third, it reduces the need for a rapid and strong normalisation of the monetary policy stance, by cushioning

fifth, i believe the region should scrutinize carefully lending in foreign currency. it is essential to set a better balance between lending in the national currency and lending in foreign currency. to this aim, the nature of the exchange rate regime and the impracticability of central banks in the region to act as lender of last resort should be taken into account. in this context, we should support a stronger role of the national currency in bank lending, making lending in foreign currency more costly for banks if it is not supported by savings in foreign currency. the strong reliance of banks on foreign currency financial resources to support the rapid lending should be addressed and managed timely. sixth, i think the current crisis will make the financial funds, which for a long time have rushed in numerous forms across all former communist countries of east europe, scarcer. this situation may have considerable implications for the long - term economic growth rates in the regional countries, which still are in need for foreign financial funds to support their convergence process. therefore, i believe that the crisis has called for another lesson : the need to draft and implement joint regional programmes and structural reforms to absorb projects and financing lines, which will in turn expand and deepen our joint balkan market. it is true that after each crisis, macroeconomics as a science has made steps forward. each crisis represents an event with specific characteristics, dissimilar or partly dissimilar from the previous crises. each crisis brings in new information, regardless of the intensity, geographic extension or duration. each crisis fills in a piece of the hard puzzle of free - market economy functioning, helping to a better understanding of the whole. i hope to provide a consensual conclusion if i say that we, the administrators, had the fortune to govern in a time of crisis and that we have a motive to feel privileged – and why not proud – to have coped with the challenge, being witnesses and active players in that regard. thank you for your attention.