Our projections suggest inflation will reach the target in 2024, driven by the stability of prices in global markets and the effects of monetary policy stance normalisation. A gradual increase in the key interest rate towards a neutral level will drive both demand and supply in the economy to a more sound balance. In parallel, economic growth is expected to maintain stable growth rates in the medium term, despite the short-term volatilities which are expected in the current year and in the next one. From its side, the  7/8  BIS - Central bankers' speeches  Bank of Albania will continue to adapt its monetary policy stance to the new economic reality. We will make sure that this stance is prudential, – on the one hand - consistent with the price stability target and, on the other hand, - coordinated with the fiscal policy direction and development in financial markets. In parallel, the latest episodes of stress in the US and Swiss banking systems have returned focus to the importance of a regulated and well-supervised financial system. In this view, allow me to point out again that the Albanian banking system appears liquid, profitable, well capitalised, and able to carry out its primary function of financial intermediation and of preserving the value of Albanian households' savings. Nevertheless, the Bank of Albania will carefully monitor the situation, and will continue attentive supervision and regulation of this system, in addition to taking care of regulatory and supervisory framework alignment with the acquis communautaire.
In particular, the rapid surge in prices over the last year, has been brought under control and inflation has been declining in recent months, through easing the pressures on household' budgets and reducing uncertainties for enterprises. At the same time, the banking sector appears sound, indicators on the stability of both public and external debt have been improving, the financial environment is calm, and enterprises and households' balance sheets remain solid. These achievements are not a result of chance. They reflect, among other things, adequate and coordinated monetary, financial and fiscal policies and the results of continuous structural reforms which we have undertaken in the financial sector. The proportional and timely reaction of these policies has minimised the immediate consequences of shocks and has safeguarded the production capacity of Albania. In parallel, continuous structural reforms have strengthened the flexibility and resilience of the Albanian economy, by helping both the monetary and financial stability of Albania. 1/8  BIS - Central bankers' speeches  In my remarks today, I will provide an overview on the main directions of the Bank of Albania's work throughout 2022 and its results. I would then like to share a brief summary of our expectations and highlight some of our primary objectives for 2023. ***  1. The outlook for the economy, price stability and the Bank of Albania's monetary policy The global geopolitical and economic environment experienced upheaval in a radical and unexpected manner at the outset of 2022, due to the Russian unjustified invasion of Ukraine.