Quarterly Monetary Policy Report, 2016/II

The Bank of Albania deems that the Albanian economy remains on a positive development trajectory. In the medium-term horizon, we expect economic growth to improve and inflation to gradually return to target. Yet, new information illustrates the risk and uncertainties surrounding the materialisation of this scenario. Thus, the external environment appears deteriorated – in terms of both the growth of our exports and the disinflationary pressures arising from it – whereas the business confidence and climate in the Albanian economy continue to remain volatile. These developments tend to decelerate the return of the economy to equilibrium and of inflation to target. In line with the analysis of this Monetary Policy Quarterly Report and the previous monetary policy stance, the Supervisory Council decided to lower the key interest rate by 0.25 percentage points to 1.25%. The stimulating monetary policy aims at boosting the growth of credit, consumption and private investments, and, subsequently, the return of inflation to target in the medium term.