"The Supervisory Council deems that the monetary conditions are adequate to comply with the medium-term inflation target, providing the necessary monetary stimulus to boost domestic demand was stated in a speech that was given this week by Ardian Fullani, Governor of the Bank of Albania, on the Monetary Policy Decision of Bank of Albania’s Supervisory Council. 
He contined to say "Annual inflationwas 2.7% in January. Higher food prices were the major contributor, about 75%, to inflation formation. In this regard, unprocessed foods, which recorded double-digit growth rates, contributed the most to this formation. The prices of the other consumer basket items fluctuated narrowly, maintaining their low contribution to inflation.
In the macroeconomic aspect, inflation was formed by the presence of spare production capacities, while supply-side shocks were absent. The slow growth of production costs and low profit margin for businesses were reflected in low core and headline inflation rates.
In addition, the stable exchange rate, anchored inflation expectations and low monetary expansion contributed to maintaining price stability.
The Albanian economy is estimated to have grown below its potential in 2012. Recent economic and monetary data confirm, overall, our earlier assessment for the presence of a negative output gap. On the demandside, economic growth was driven mainly by net exports growth, whereas domestic demand is estimated to have provided low contribution. Data on trade in goods during the fourth quarter show that exports increased 12% and imports fell 9.5%, year on year. Subsequently, the nominal trade deficit narrowed 20.1%, in annual terms, boosting aggregate demand in this quarter. On its side, domestic demand remains weak, due to consumers and businesses hesitation to consume and invest."
Concluding, "the Bank of Albania expects the inflationary pressures to remain weak in the medium run."
At the end of the discussions, the Supervisory Council decided to keep the key interest rate unchanged at 3.75%.The Bank of Albania will continue to implement a stimulating monetary policy for as long as inflationary pressures will remain weak. Stimulating monetary conditions support aggregate demand growth and full utilisation of production capacities, creating, therefore, the premises for complying with the medium-term inflation target.