Annual Report 2014

The Albanian economy has faced a challenging external environment, amid supply shocks which damaged production in specific sectors of the economy and the impossibility to use the fiscal stimulus. Economic growth, however, improved during 2014 thanks to the growth in domestic demand and private sector activity. Nonetheless, inflationary pressures remained low, reflecting the cyclical weakness and downward imported inflation. In 2014, the average inflation rate was 1.6%. In an environment with weak inflationary pressures, the stimulating stance of the monetary policy was further strengthened. The key interest rate was lowered from 3% at year start, to 2.25% at year end. To transmit the monetary stimulus, the Bank of Albania used the common framework of liquidity injection instruments and the forward guidance.