March 20 (SeeNews) - The Bank of Albania said on Wednesday it has decided to maintain the key rate at 3.25% amid persistent internal inflation pressures, prompted mainly by solid demand and increased wages.
Inflation has eased to an average of 3% in the first two months, down from an average of 3.9% during the fourth quarter of 2023, meeting the central bank's target rate ahead of the projected timeframe of mid-2024, central bank governor Gent Sejko said in a statement. The deceleration can be attributed to a decrease in the growth rate of food prices, primarily in imports.
Preliminary data indicates sustained economic growth driven by increased consumption, private investments, service exports, as well as accelerated public spending, backed by rising household incomes and stable business finances.
Employment grew 0.6% during the fourth quarter of 2023, whereas private sector wages grew 11.6%, which upholds inflationary pressures.
The central bank also maintained the interest rate on the overnight lending facility at 4.25% and the rate on the overnight deposit facility at 2.25%.
Albania's EU-harmonised index of consumer prices (HICP) rose 2.8% year-on-year in February, decelerating from a 3.8% annual increase in January, the statistical office, INSTAT, said earlier this week.
The Bank of Albania increased its key rate six times in 2022 - in March, July, August, October and in November, keeping it unchanged thereafter.