Allow me to emphasize once more the willingness of the institution I govern for meeting all the obligations deriving from the Constitution of the Republic of Albania and from the Law “On the Bank of Albania”. This will be achieved through further perfecting the framework of monetary policy and monetary operations and simultaneously through deepening our knowledge in terms of functioning and causative inter-dependence characterizing the Albanian economy. I believe that year 2005 will be a successful year in terms of research, particularly in increasing the forecasting power on inflationary developments and in improving the Bank of Albania governance. I would like to cite that adaptation of inflation targeting regime remains our political aspiration, a fact that makes us be seriously committed to prudentially follow the relevant pre-conditions. For this purpose, we will continue the relevant theses we need for finding understanding and proper support of the Assembly and other state institutions. I would like to ensure the Assembly of Albania that our recent steps and expected ones take into account even our national aspiration for a faster integration into the European Union. We have already understood that no genuine integration can exist without financial integration. The country needs more income, more political stability, more social and cultural integration, but as much important is the financial integration as well. From this viewpoint, I think that the role of the institution I govern, the role of the banking system and of the financial sector is primary and we have many challenges ahead of us.
During 2004, Albania’s balance of payments recorded a flow of financial assets and capitals of about 1.5 times higher than the previous year. The rise of inflows in the financial account and the non-deepening of current deficit brought about the increase of foreign reserves by about USD 290 million over 2004. Albania’s foreign reserve is sufficient to cover about 5.2 months of imports of goods and services. 4  Government debt including other sectors debt guaranteed by Government. BIS Review 38/2005  3  Notwithstanding the positive developments of the recent years, the economic growth and the macroeconomic stability of the country are two parameters, which, according to our consideration, cannot and should be considered as issues already accomplished. The high trade deficit requires the ability to find stable long-term coverage resources, especially to promote foreign direct investments, which will raise the productive capacities of the Albanian economy. A major interest should be given particularly to the sectors such as agriculture and tourism. Fiscal policy must continue to conserve its positive contribution in the consolidation of the macroeconomic stability, a contribution being expressed in the reduction of budget deficit, in the increase of income and in the establishment of priorities according to the National Strategy for the Socio-economic Development, in the performance of budget expenses.