Quarterly Monetary Policy Report, 2023/II

The new information analysed in this Report has resulted better than our expectations. Inflation continued setting on a downward trend in the first quarter, resulting from the overall decline of inflation in global environment, the high comparative base effect of a year earlier and from the first effects of momentary policy normalisation stance. At the same time, economic activity in Albania continued to grow at a stable pace. Our forecasts suggest inflation will continue to gradually decline in 2023 and return to its target in the first half of 2024. Economic growth in Albania is expected to remain in positive territory, underpinned by the sound balance sheets of private sector, the positive prospect in labour market, the improved confidence of economic agents and the still accommodative financing conditions. The Supervisory Council decided to maintain the monetary policy stance unchanged. Nevertheless, the domestic inflationary pressures remain elevated and meeting the price stability objective may require a further normalisation of the monetary policy stance in the future.