Describing lower household consumption as one of the key factors curbing growth, governor Fullani called on Albanian consumers to increase spending to help the Albanian economy
Tirana Times
TIRANA, July 27 – Central bank governor Ardian Fullani says Albania’s economy continued its slow growth even in the second quarter of this year mainly because of rising prices for raw materials and food products in international markets and lower consumption.
The comments were made on Wednesday in a press conference where governor Fullani announced the Bank of Albania’s Supervisory Council had decided to keep the key interest rate for lek unchanged at 5.25 percent. According to him, inflation rate during the second quarter of this year was at 4.1 percent, remaining 0.1 percent above the central bank’s target band.
Last March, Albania’s central bank decided to raise the repo rate by 0.25 percentage points to 5.25 percent after keeping it unchanged at 5 percentدne of the lowest historic levels, for the past 8 months. Governor Ardian Fullani said the move was aimed at keeping inflation rates in check following a sharp rise in consumer prices.
Describing lower household consumption as one of the key factors curbing growth, Fullani called on Albanian consumers to increase spending to help the Albanian economy.Albania’s economic growth during the first half of this year has mostly been supported by industry and services sectors.
Latest data published by the country’s Institute of Statistics show the Albanian economy grew by 3.4 percent in the first quarter of 2011 year-on-year with transport, industry, construction and trade as the key sectors contributing to the growth. The 3.4 percent growth comes at a time when retail sales continued to fall in the first quarter of this year, marking a drop in purchasing power and an ongoing saving trend as consumers expect harsher times ahead. Latest figures published by the country’s Institute of Statistics show retail sales in the first quarter of 2011 dropped by 5.9 percent year-on-year and 12.3 percent compared to the final quarter of 2010.
The Bank of Albania says the inflation rate, which during the first five months of this year has been up to 4.5 percent exceeding the central bank’s target by 0.5 percent, will return to normal rates by the end of this year.
The inflation rate returned within the Bank of Albania’s target band in June 2011 after remaining above the 3ѱ percent target for four consecutive months. INSTAT data show the Consumer Price Index was up 3.9 percent year-on-year in June 2011, registering a drop of 1.1 percent compared to the previous month.
Domestic production continued to positively contribute to the inflation rate “especially the vegetables including potatoes” subgroup whose prices fell by around 20 percent compared to the previous month. Meanwhile, fuel prices dropped by 0.6 percent.
