Monetary Policy Report Q2 - 2014

The Albanian economy improved in the first half of the year. Economic activity expanded, due to the increase in private consumption and investments, and was supported by a stimulating macroeconomic policy mix. In the first half of the year, the economy performed, overall, in line with our projections; however, inflation’s performance was worse than expected. The Bank of Albania expects the tendencies noted in the first half to continue in the second half of 2014 and in the next year. Economic growth will continue to maintain positive rates and improve further, contributing to the gradual return of inflation to target within the medium term horizon predicted by the monetary policy transmission mechanism. From the available information, taking into account our projections, the action force of the monetary policy transmission mechanism and other financial stability-related considerations, the Bank of Albania deems that the monetary policy will remain stimulating during the medium-term period.