Performance evaluation: Uncertainties in forecasting inflation

This paper aims to present the developments in the inflation forecasting process for the period 2007-2010 and their integration into the monetary policy decision-making at the Bank of Albania (BoA). The history of forecasting at the BoA is still recent compared to earlier experiences in this field, but relatively “mature” compared to the forecasting work at the other institutions and agencies in the country and in the region. Besides our experience in developing forecasts, the reliable and timely statistical information remains a crucial factor in the projection process.