Monetary Policy Report for the Third Quarter of 2008

Economic activity during the third quarter the present year has been carried out amidst strained settings in the developed countries’ financial markets and economies. The turmoil the financial markets went through is being translated into the deceleration of consumption and investments, which in turn generate the slowdown in economic growth and the upsurge in unemployment in many developed countries. Despite the financial markets’ strains and the first signs of global economic slowdown, the Albanian economy has been relatively resilient during the third quarter. According to the available data, economic growth at home has progressed in line with the projections and inflation remains at contained rates and within the Bank of Albania target. In addition, the Albanian banking system is presented sound and stable and adequately capable of carrying out its financial intermediation function. Taking note of the increasing public interest in the stability of the Albanian financial system, the Bank of Albania notes that the economic agents’ confidence in our financial institutions and their products has been intact.