February 2 (SeeNews) - Albania's central bank decided to maintain its policy rate at 2.75% as recent data shows that inflation is slowing and economic activity is expanding, governor Gent Sejko said.
The central bank also kept unchanged the interest rate on the overnight lending facility at 3.75%, as well as the rate on the overnight deposit facility at 1.75%, Sejko said in a statement on Wednesday.
Albania’s annual harmonised index of consumer prices (HICP) increased by 7.5% in December, after advancing by 8% in November, according to the latest data by the national statistical office. The country's economy grew by an annual 4.02% in the third quarter of 2022, after increasing by 2.23% year-on-year in the second quarter.
"These trends are expected to continue in the next quarters as well. In particular, the update of projections reaffirms our expectations that inflation will return to the target within the first half of 2024," Sejko said.
Economic growth is expected to continue to grow as the main financial stability indicators are expected to remain under control. However, the central bank expects slower economic growth in 2023, which mainly reflects the expected foreign demand dynamics and the action of base effect, the governor said.
The central bank raised its policy rate five times in 2022 - in March, July, August, October and November.