Monetary policy report 2012 Q2

During the first half of 2012, the Albanian economy continued to maintain the parameters of macroeconomic and financial stability, against an increasingly challenging global context. Consumer price inflation, budget deficit and public debt indicators, balance of payments and financial situation of the banking system were stable. In particular, the Albanian financial sector remains well-capitalised, liquid and able to conduct its intermediation role. During this period, the Albanian economy experienced some shocks on the supply side, with structural movements in the domestic financial markets, and a slowed domestic and foreign demand. These developments drove the fall in GDP in the first quarter of 2012 and hampered the implementation of stabilising policies on the aggregate demand. As tensions may be reduced in the second half of 2012, the Albanian economy is expected to record positive growth rates.