Affected less than other countries by the global crisis, Albania will see positive economic growth, although not much compared to previous years, the IMF says. Banking sector and inflation have become more stable.
By Tirana Times Staff
The IMF has completed its latest evaluation of Albania’s economy while the world was undergoing the worst economic crisis in decades.
Affected less by the global crisis than other countries, Albania will see positive economic growth, although not much compared to previous years, the IMF says. Banking sector and inflation have become more stable.
As a result, economic growth this year will be lower than earlier projections. But, according to the IMF, the important thing is that Albania will see positive growth.
“The global economic and financial crisis has adversely affected the economy of Albania, although to a lesser extent compared with neighboring countries. The economy is expected to return to positive growth during 2009, driven by a sound foundation of growth supported mainly by domestic demand and funded mainly from its own budget,” says the IMF report.
Helped by the fall in international prices, inflation pressures were subdued and inflation rates have moved to the lower half tolerance group, from 2-4 percent, set by Bank of Albania.
In August, the annual inflation was 2.2 percent and inflation expectations remain well anchored around the target of the central bank.
After a series of measures taken both by the Bank of Albania and the Albanian government, confidence in the financial system has been restored, improved liquidity and deposits are growing. Short-term interest rates are low and stable, while long-term rates remain high, reflecting some degree of economic uncertainty and high risk premiums.
“Improving liquidity in the banking system, together with the reduction of risk premiums and a better international environment is likely to result in rapid credit growth in the near term,” according to the IMF report.
