- term stability of public and private balances. in this situation, central banks are obliged to undertake a series of extreme and qualitatively - different measures, which have been never tested before and exceed all imaginary boundaries of the monetary policy. actually, politicians are obliged to cope with debt crisis through an extreme fiscal policy aiming at short - term balancing and long - term stability of the fiscal policy. the focus and emphasis of the economic policy remains long - term rebalancing by cutting on expenses. an important part of these measures is very focused on the short - term problematic, hence risking to disregard the undesired effects in the long term. under the pressure from social costs, the philosophy of current policies is to overcome the situation and maintain social peace and macroeconomic stability at the expense of sovereignty. this emergency compromise has shifted the focus away from structural reforms, which guarantee rebalancing through the increase of income. often, the perspective of economic policies does not extend beyond some quarters ahead, while a much longer time vision should be considered. the anchoring of the future should start from the present. the actual philosophy of stabilising policies is based on past experiences with the hope that the current crisis is similar to previous ones. this reasoning has urged the authorities to insist on recycling stabilising measures. the time, however, shows that the global economy has undergone radical changes. the current crisis is happening as the global economic map is being redesigned in terms of economic size, geographic distribution of savings, debt, and trade and current balances. advanced economies have traded positions with the emerging ones across all these dimensions. consequently, old recipes do not provide an exit given that axioms on which they are based have changed. the solution of current and future challenges requires a new philosophy of thinking based on the new global reality. bis central bankers ’ speeches this reality, globalisation, is no longer a choice, but a fact that should be taken into account when formulating long - term development strategies. turning to a regional setting, i think that this philosophy should be embraced and supported without hesitation. in order to make it more productive, we should be more opened to each other and take regional cooperation to new and higher levels. individual prosperity of the economies of the region requires that we leave behind the philosophy of competition encouraged and inherited by state - formation efforts and sclerotic models that dominated the last century. we need to prepare the way for elevated economic and financial cooperation and coordination. we need

and will be reliable and transparent for all albanian and foreign economic agents. developments in the external sector of the economy signalled a sluggish foreign demand in the third quarter of the year. though trade deficit dropped, the external sector impacted negatively on the economic growth due to lower tourism revenues. in october and november, the external trade data show ongoing annual nominal contraction of the trade deficit, at 11. 9 %. this contraction was due to increase in exports by 12. 0 % and decrease in imports by 2. 0 %, over this period. the albanian economy's capacity to maintain and speed up the positive export growth rates will determine the country's medium - term and long - term economic growth. in the medium term, increasing exports helps offset the domestic demand sluggishness, while in the long term, increasing competitiveness of the albanian economy in the world markets should be to the core of albania's new economic growth model. the low demand for consumption and investment, and the banks'conservative lending policies, have slowed the monetary indicators. the increase in the money supply slowed down to about 2. 5 % in october and november due to private sector's lower demand for funding. lending to economy continued to contract and in november, it was 2. 4 % lower than a year ago. the above monetary and economic dynamics has exerted weak inflationary pressures. the low aggregate demand has expanded the negative output gap. the labour market pressures have been subdued against a setting of unchanged unemployment rate, moderate wages, and partially - used capacities. these developments have affected the control on output costs and profit margins, and are reflected in low core inflation rates over this period. also, imported inflation has been downward due to lower primary commodity prices in the international market and stable exchange rate. based on the economic outlook and aiming to encourage aggregate demand, the bank of albania lowered the key interest rate by 0. 5 percentage points, at 3. 0 % in the fourth quarter. also, bank of albania's monetary policy decisions are associated with ongoing liquidity injections and orientations toward the future monetary policy stance. this policy has bis central bankers ’ speeches managed to keep liquidity premia and inflation in check, by contributing to lowering the interest rates in the interbank, government debt security, lek loan and deposit markets. however, the lek loan price has not fully reflected our monetary policy, indicating the presence of high risk premia and containing the monetary stimulus transmission to the economy