May 4 (SeeNews) - Albania's central bank decided to keep its policy rate at 3% as inflation decreased but inflationary pressures remain high, governor Gent Sejko said.
Inflation shrank to 6.5% during the first quarter of 2023, from 7.9% in the previous trimester, but a recent 14.2% jump in the private sector wages and increased demand for goods and services call for cautious monitoring, Sejko said in a statement on Wednesday.
The central bank also affirmed the interest rate on the overnight lending facility at 4%, as well as the rate on the overnight deposit facility at 2%.
Albania’s annual harmonized index of consumer prices (HICP) increased by 5.5% in March, after advancing by 6.8% in February, according to the latest data by the national statistical office. The country's economy grew by an annual 4.73% in the fourth quarter of 2022, after increasing by 4.02% year-on-year in the third quarter.
Economic growth is expected to continue in 2023, while inflation is seen to decline during the next quarter and return to the 3% target by mid-2024, Sejko said.
The central bank raised its policy rate five times in 2022 - in March, July, August, October and November – and once in 2023, in March.