Fullani: Positive economic performance continued in Q1

TIRANA, April 27 – The Albanian economy is estimated to have continued its positive trend of growth even in the first quarter of 2011 despite slow progress in consumption and investments. The comments came on Wednesday in a press conference by central bank governor Ardian Fullani who announced the Supervisory Council had left the key interest rate unchanged at 5.25 percent after raising it one month ago by 0.25 percentage points in a move aimed at keeping inflation rate in check following a sharp rise in consumer prices.
“The current monetary conditions remain favorable to achieve the inflation objective and continue stimulating the economic activity,” said the governor explaining the key interest rate for lek. According to Fullani, the average inflation rate during the first quarter of 2011 was at 4 percent, standing one percent above the mid-term inflation target. The increase was a result of high rise in global food and oil markets severely affecting Albania which is net importer. However, the contribution of domestic agricultural production is expected to considerably improve the situation starting from April 2011.
The Albanian economy grew by 3.9 percent in 2010, 0.2 percent below government’s expectations but far better compared to the 3 percent GPD growth forecast by international financial institutions such as the World Bank, the IMF and the EBRD. Latest data published by the Albanian Institute of Statistics show the country’s GDP grew by 5.4 percent in the final quarter of 2010 with industry and trade as the key sectors contributing to the growth. Meanwhile, the construction and post-telecommunication sectors continued suffering registering negative growth rates.
The economic growth in 2010 remained below the average GDP growth of more than 6 percent Albania recorded from 1998 to 2008, reflecting the global crisis effects. After shrinking by 0.8 percent in the last quarter of 2009, the economy managed to return to positive rates, registering year-on-year growth rates of 2 percent in the first quarter of 2010 and 3.3 percent in the second quarter.
The poor performance after the 3.3 percent GDP growth in 2009, when Albania became one of the few economies to register positive growth in global crisis year, was first of all affected by the sharp shrink in the construction sector and the deterioration in the post-telecommunications market.