BANK OF ALBANIA
European Central Bank delegation visits the Bank of Albania to discuss the 2023 economic reform programme
Publication date: 20.02.2023
On 17 February 2023, a staff delegation of the European Central Bank (ECB) paid a work visit to the Bank of Albania, in the framework of the dialogue process with the European partners on the assessment of the economic reform programme for 2023.
The delegation discussed economic, financial and banking developments and policies with the leading officials of the Bank of Albania.
In the meeting with the Governor of the Bank of Albania, Mr Gent Sejko updated the ECB's delegation on the macroeconomic developments in Albania and BoA's expectations on the domestic economy.
Governor Sejko emphasized that the Albanian economy has shown sufficient resilience against the shocks caused by the pandemic and, most recently, from the war in Ukraine. To this end, the Governor highlighted that post-pandemic economic recovery has been swift and all-encompassing, demonstrating the soundness of the balance sheets and the flexibility of the private sector, as well as the appropriateness of the monetary, financial and fiscal policy course followed during this period. Furthermore, Governor Sejko underlined the fact that rapidly increasing inflation in Albania was engendered by soaring prices in international markets during 2022. However, the rising inflation has been under control, due to the reaction of the monetary policy, the strengthening of the exchange rate and the caps placed over energy prices. At the same time, the domestic economic activity, employment, and wages have continued to go up.
Concerning financial markets, the Governor said that they will remain calm. Lek has appreciated against euro, since the transmission of the normalisation of the monetary policy stance in Albania is increasingly more complete. Nonetheless, lending to the private sector continues to grow, and banking sector's balance sheets remain sound.
Furthermore, Governor Sejko stressed that the perspective regarding the main economic indicators continue to be relatively solid. The Albanian economy is expected to continue its growth over the upcoming years, whereas inflation forecasts show that it will return to target within the first half of 2024. These forecasts are consistent with the continuation of the normalisation process of the monetary policy stance. But, the speed of normalisation will depend on the new data available, the performance of inflationary pressures and the balance of risks affecting them.
In conclusion, Governor Sejko expressed his gratitude to the ECB, in particular, for its continuous support provided in the form of information exchange and an ongoing policy dialogue, as well as a EUR 400 million repo line granted during the pandemic and renewed recently. The Governor emphasised that although this line has not been used, the Bank of Albania assesses that this instrument is significant given the additional uncertainties stemming from the continuing war in Ukraine, the global economy and financial markets.