Governor Sejko: Welcome Remarks at the 18th SEE Economic Research Workshop

Your Excellency Ambassador Huber!

Dear participants!

It is a great pleasure for me to welcome all of you to the 18th South-Eastern European Economic Research Workshop hosted by the Bank of Albania. I have the pleasure to address this traditional event, where researchers and academics, from the region and more broadly gather to discuss on the economic and financial challenges which affect our economies.

I would like to thank the Research Department at the Bank of Albania and all participants from other central banks for their precious contribution and support for more than a decade in realising this collaboration.

A special welcome to Her Excellency Swiss Ambassador in Tirana, Ruth Huber, whose presence highlights the close cooperation between our two countries in advancing both the economic research and capacity building. Currently, we are working for establishing a robust and useful economic modelling infrastructure to support the Bank of Albania's decision-making regarding climate change and its impact on financial stability.

This year's conference takes place at a special moment: global economy is facing heightened uncertainties originating from an environment of unstable inflation and interest rates, in addition to political and institutional uncertainties that create the ground for significant policy changes and governance in the next years. Also, other long-term challenges related to climate change, digitalization and financial inclusion, or cyber security, require our commitment to adopt important policies, which are stimulated by discussions in such forums.

The papers and research works that will be presented during these 2 days will discuss the implications of interest rates and exchange rates in the economy and in the financial sector, focusing on the way trade and finance interact with each other, as well as with Environmental, Social and Governance (ESG) factors, with a view to the sustainable and long-term development of the economy. The balance between monetary and fiscal policies, the dynamics of digital finance and the implications of real estate prices on macro-financial stability are other issues that will be addressed in this Conference.

The vital role of capital inflows, such as foreign direct investments and remittances, in bolstering growth and macroeconomic stability will be part of discussions as well. The exploration of artificial intelligence and machine learning research methods, as well as their transformative power in policy making and analysis bring this event’s agenda to another level of discussion. The use of these tools has become increasingly critical in enhancing the accuracy and suitability of decisions and policies, especially in the light of rapid economic and financial changes, as well as of an ever-increasing amount of information.

I must point out that the Albanian economy has experienced important structural changes, related to the rapid growth of tourism and construction; demographic changes related to the ageing of the population, its migration, as well as to the EU integration process. Albanian economy, over the last five years, has dealt with significant fluctuations in prices as a result of natural phenomena, economic shocks and geopolitical developments. Our monetary policy, in its reaction, has proven to be flexible to these changes, providing for financing conditions - as reflected in broad-based credit growth and ample liquidity in the financial system – that remain favourable for the sustainable economic growth.

On the other hand, in addition to adjustments in interest rates, the Bank of Albania has implemented other policies, such as macroprudential ones in interaction with those of a microprudential nature. At the same time, we minimized price instability, by preserving a delicate demand and supply equilibrium. Our strategic management of monetary conditions enabled inflation return to the target without triggering a recession, reflecting our commitment to safeguard macroeconomic stability in the country.

In parallel, the Bank of Albania has undertaken a number of other initiatives, regarding the strengthening of financial inclusion and financial literacy. In this context, the law on payment services, the law on payment account with basic features, our membership in SEPA and the strategy on financial inclusion and financial education, are expected to engender important changes in the further development of the financial system. These measures aim to modernize it, increase financial inclusion, reduce informality in the economy, and improve the monetary policy pass-through. They are crucial for preserving price and financial stability, bolstering a sustainable growth and supporting the macroeconomic objectives of Albania at a broader extent.

Dear guests,

I am confident that the insights obtained at this forum will enrich our knowledge on complex issues we deal with and will help us establish more effective policies for the purposes of price and financial stability, in turn for the sustainable and long-term economic growth.

Also, I think that your research provides an important contribution to central banks, empowering them to serve as a fundamental pillar of price and financial stability, a role which the Bank of Albania plays with great responsibility.

I would like to thank once again Her Excellency, Ambassador Ruth Huber, along with the State Secretariat for Economic Affairs (SECO) for their contribution in supporting research activity, monetary policy and financial stability at the Bank of Albania. This contribution has strengthened the know-how, expertise and the application of up-to-date methods of economic and financial analysis in addition to improving and expanding the models of forecast and analysis. In this context, this collaboration will further expand in the future on other areas of central banking.

Allow me congratulate you once again, encouraging you to continue your research projects, aimed at yielding useful findings, suggestions and advice for decision makers.

I wish you the most fruitful discussions, to build together a sustainable long-term economic future across all South-Eastern European countries.

Thank you!