It wants to explain better why it is aiming for an inflation rate of 3%. The communication strategy of the Bank of Albania is to explain the working of the monetary policy issues and its own tasks, to you all. The understanding of the public is needed for a good conduct of Inflation Targeting. Credibility has to be gained. As said before, a solid statistical framework is also indispensable. Reliable statistics can tell us about the past and the present. On the basis of this, the Bank of Albania can use its econometric models to forecast the future. The Bank of Albania can conduct monetary policy, and can target inflation better, in case of better forecasts. We can stress the preconditions. But the fulfillment of all preconditions for Inflation Targeting depends also on others in the Albanian economy. Under Inflation Targeting, the monetary policy aims at a precise inflation target in the medium term. The Bank of Albania can only reach this target in case the interest rate setting affects the deposits, credits, private consumption and business investment, GDP, like in a developed market economy. Only in this case can monetary policy be effective. Therefore, some preconditions for putting full fletched Inflation Targeting in place can not be met ONLY by the Bank of Albania. They depend upon the development of the Albanian economy, they depend upon the provision of statistics by INSTAT and others, they depend upon the understanding of the public.
It has built a macro-econometric model with all these channels that transmit monetary policy in the Albanian economy. The main purpose of the model is to analyze the reaction of prices, private consumption and business investment and so on, in reaction to changes that may take place. We call these changes in analytical terms “shocks” to the economy. Our macro-econometric model is promising. Very promising. But for building econometric models we need statistics. Albania has statistics, but we need better statistics. For the year to come, the Bank of Albania wants to improve the statistical framework. The Bank of Albania needs better statistics, I said. With “better” statistics I mean here “more” statistics, “reliable” statistics and “user-friendly” statistics. We need to measure all macro-economic developments in the economy better. And we need to keep track of these developments. Our Albanian history is still short. We only have time series for about 15 years. In time we will logically have longer time series. Our time series need to become timely available and they should be fully understandable. Inside the Bank of Albania we can work more on statistics. In the year 2007 the Bank of Albania will improve its own database on monetary and financial statistics, and on the balance of payment  BIS Review 121/2006  1  statistics. But, for other statistics we depend upon our national statistical office, INSTAT. We also depend on other institutions for providing us with relevant information.