The low level of exports'
diversification could be considered an essential weakness of the Albanian
economy. Albania exports mainly minerals and oil and because of this, it is
highly sensitive to the price of these exports, governor of the Bank of Albania
Gent Sejko declared in an interview for local media recently.
According to him, inflation declined to
0.2-0.3% in the beginning of the year, in February and March while he added
that such decline was due to the impact on the price of the products that Albania
Further on, Sejko said that the level of
economic perception is another weakness of the Albanian economy as the perception
is way more negative that the economic reality in Albania.
“This perception has an impact
attributable directly to foreign and domestic investments. Informality is
another negative factor for the Albanian economy. Initiatives to fight
informality have provided positive effects in relation to income. Thus, income
increased however informality in Albania remains high,” governor said.
Asked on the Bank of Albania and
Government’s national plan of measures to reduce non-performing loans portfolio,
Governor Sejko said that the plan was well-studied and it affected all the
elements and factors that would have their impact in the improvement of the
non-performing loans ratio.
“Non-performing loans are not created
during a single year. They are created and have increased over the years. Of
course there are many elements of the plan of measures that will be implemented
in 2017. The Parliament recently adopted the law on bankruptcy. Other laws that
address the issue of non-performing loans have been adopted as well. So, we
expect another write off of non-performing loans from the banks' balance
sheets, which will lead to the reduction of non-performing loans,” he said.
In terms of the Bank of Albania expectations
for 2017 as an election year, Sejko said that BoA does not expect major
fluctuations or deviations from its forecasts despite the fact that this is a
year of elections.
“There are positive and negative
elements, related to the election year. The increase of public investments is
one of the elements that affect economic growth. On the other hand, there are
negative elements, which might be a lower income. However, these elements may
offset each other in their balance thus not have any impacts. It is important
that the electoral process is carried out correctly and there are no political
issues,” governor noted.
While assessing the performance of the
Albanian economy during last year, Governor stressed that the positive growth
trend continued in 2016.
He added that this economic growth was a
result of increased consumption and domestic private investments while he
underlined that the Bank of Albania has followed an accommodative monetary
policy, which has also affected the funding sources of this economic growth.