Main macroeconomic indicators1 2000  2001  2002  2003  2004  Real economy indicators (in point percentage) GDP growth  7.8  6.5  4.5 - 5  6.0  6.0  Annual CPI (average)  0.0  3.1  5.2  2.3  3.0  Nominal GDP (Lek billion)  539.2  590.2  678  745  823  -8.2  -6.9  -5.8  -4.8  10.6  Fiscal indicators (in percentage versus the GDP) Fiscal deficit  -8.9  Monetary indicators (in percentage point) M 3 Growth  12  19.9  7.0  9.5  3m TB Interest rate  7.8  8.0  10.6  7.6  2.1  Inflation and monetary policy in 2004  The monetary policy of the Bank of Albania during 2003 was characterized by easing trends of the monetary conditions, in compliance with the lessening the inflationary pressures and improving the monetary indicators. The Bank of Albania took up the implementation of an easing monetary policy since April 2003 reducing the core interest rate by 0.5 percentage point. In July and October 2003, there were two other reductions by 0.5 percentage point each, bringing the core interest rate at the level it was at the beginning of the previous year. At the end of November 2003, the core interest rate was 7.0 percent; the annual inflation rate for that month was 3.4 percent, whereas the average annual inflation by the end of October was just 2.24 percent.
In these last three years, it was within the interval of 2-4 percent, as targeted by the Bank of Albania. 2. Monetary program of 2004  Pursuant to drafting and implementing the monetary policy, the Bank of Albania designs each year the monetary program, which is a financial plan aiming at disciplining the funds circulation in economy, in conformity with the development objectives of the country. The main objective is meeting the needs of the economy for monetary assets, without influencing the balance of demand-supply for monetary assets, generating thus inflation or shrinking the economy. The monetary program of 2004 has also been set up on the same premises. Its not a secret the fact that in the coming year as well, as in the previous ones, the two main decision-making institutions of the country in the field of economics and finances, the Albanian Government and the Bank of Albania, have agreed upon the general objectives of the country’s development, including also the so called harmonized cohabitation between the fiscal and monetary policies. This process, albeit all, was part of a constructive consultation with institutions such as IFM and the WB, enabling thus a new financial agreement between these two institutions for 2004. BIS Review 8/2004  3  Table 2.