Foreign loans increase by 10 million euro in the first quarter.

TIRANA, June 22؁ccording to the report, “For the development of the external economic sector”, issued by the Bank of Albania (BoA), partners and donators have increased their financing to the Albanian economy in 2008. A surplus of 10 million euro has been received by Albania in foreign financing during the first of 2009 compared to the same period a year ago.
“Foreign long term financing and soft loans amounted to 33 million euro in the first three months of 2009 from 23 million euro million euro that were awarded to Albania in the first quarter of 2008,” it was stated in the report.
BoA estimates that over 75% of such loans went to the public sector, mainly to infrastructure projects. As a result, the report noticed a substantial increase in Albania’s foreign debt level.
“The current increase in financing levels from abroad has also increased future debt payments regarding foreign debt,” it was reported.
Taking into consideration the ongoing international financial and economic crisis, the increase in foreign credit to Albania is somewhat a surprising sign of trust in the country’s economy.
“The current financial market has no money to lend and you know that money is a good like any other that is subject to supply and demand. There are other countries in our region, countries in transition, that have asked for loans with steep interest rates of 20% or higher, but have not been able to secure them, because their respective economies don’t offer the necessary trust. The same situation can be seen in all the international markets and even in regards to developed countries. Such is the market today,” said Ridvan Bode, Minister of Finance, after announcing that his government had managed to secure a 250 million euro loan last month. The loan was a contract from foreign banks and the above remarks were made to explain the high interest rates agreed to in the loan.
Indeed, according to forecasts from different authorities, domestic and foreign, Albania is one of the few countries, regionally and continentally that would keep a positive economic growth in 2009. Forecasts from foreign institutions such as the World Bank or the IMF estimate a GDP growth within 2%, well below the government’s hopeful estimation of 6%. Nevertheless, such positive forecasts might very well be enough to guarantee faith in the Albanian economy and translate to higher foreign financing.