Tirana Times
TIRANA, May 30 – The central bank has warned that latest data show a slowdown of the Albanian economy during the first months of this year. The Bank of Albania said that preliminary and indirect estimates show the rate of private consumption has been controlled and that consumers are being more oriented to saving.
“The low level of use of capacities in the economy, the low levels of investment loans, and the decrease in import of capital and intermediary goods signal a shrink in private investments even during the first three months of this year,” said governor Ardian Fullani in his latest press conference, warning that private sector demand for money continues remaining at low levels.
However, the slowdown of domestic demand was compensated by the good performance of Albanian exports, whose rapid growth of 45.1 percent in the first quarter of 2010 positively influenced on the total demand and economic growth, said the central bank.
The rapid growth of exports and moderate decrease of imports cut the budget deficit by 17.1 percent. The central bank says the annual trend of lending to private sector fell by 4.8 percent year-on-year in March 2010.
Businesses’ demand for loans continues remaining the only source of credit growth, while loans to individuals continued shrinking for the fifth month.
The low economic activity has also been reflected on the slow growth of budget revenues by 3 percent during the first four months of this year. Recent data published by the Institute of Statistics, INSTAT, show that the country experienced a slowdown of economic activity in the last quarter of 2009.
The GDP growth decreased by 0.8 per cent in the fourth quarter of 2009 compared with the same quarter of 2008 and registered a 2.4 per cent drop compared with the third quarter of 2009. Based on its quarterly assessments of the country’s GDP, INSTAT calculated that Albania registered an annual growth of 3.3 per cent in 2009.
Key interest rate unchanged
The Bank of Albania kept the key interest rate unchanged at 5.25 percent during the latest meeting of its supervisory board. This decision is in accordance with meeting the inflation target in a mid-term period and guarantees the necessary monetary conditions to support the healthy development of the economy, said the central bank,
Last October, the supervisory board of Albania’s Central Bank cut the institution’s key interest rate by 0.5 points, from 5.75 to 5.25 per cent, in an effort to boost lending in lek, the national currency.
