Seminar on inflation held in Tirana

TIRANA, Dec. 8 – The central Bank of Albania held Dec. 7-8 a two-day seminar on inflation named “Round Table on Target Inflation 2”. a group of albania and international experts gathered in Tirana to discuss on efforts to keep inflation under control. Albania tries to keep inflation at the three percent rate and has successfully managed to keep that. The round table on Inflation Targeting was a follow-up of the Open Forum, another meeting which has globally discussed the preconditions for Inflation Targeting. They discussed on issues that need to be solved before the BoA can put a fully fletched Inflation Targeting regime into place, according to bank governor Ardian Fullani. One of the discussed topics was the econometric modeling and forecasting. The BoA uses now a reliable analytical framework that provides information useful to the monetary policy decision making. Under Inflation Targeting more information would be needed about the expected inflation developments in the future. The primary objective of the BoA is to achieve and maintain price stability in Albania, said Fullani. It needs to be able to forecast the development of prices in the future and its econometric models provide with the information about these future developments. Its internal studies show that the BoA is able to make reliable forecasts. The governor also said that energy could be one of the main factors to increase inflation. “The Albanian production will slow down due to the overall lower demand for goods and services,” said Fullani, adding that process would take some time. The BoA aims at an average increase of the consumer price index of 3 percent. The BoA will set the interest rate for keeping expected price increases to 3 percent plus or minus 1 percentage point. It has built a macro-econometric model with all these channels that transmit monetary policy in the Albanian economy. “Our macro-econometric model is promising. Very promising,” said Fullani. Albania has statistics, but we need better statistics. We need to measure all macro-economic developments in the economy better, he said. In 2007 the BoA will improve its own database on monetary and financial statistics, and on the balance of payment statistics. The BoA will improve upon its communication with the public.