As announced in latest reports by the Bank of Albania, the inflation rate still remains at 2% but the Central Bank aims to increase it up to 3% within the two upcoming years. In its Annual Supervisory Report for 2014, Bank of Albania predicts an increase of inflation and foresees that Bank’s objective for increasing the inflation to 3% will be reached no earlier than in 2017. During this year, prices of unprocessed products recognized frequent fluctuations due to the heavy flooding in the beginning of the year, which caused huge damages in agriculture.
The increase of inflation will come gradually with the revival of the economic sector in overall, according to the report. Bank’s projections for the increase of inflation are based in a possible progressive economic growth and a fuller exploitation of producing capacities in the upcoming years in several sectors. “The economy increased by 2.8% during the first quarter of 2015, a percentage which exceeded our predictions and reflects the increase of investments and net exports”, says the report. In the second quarter, the economy increased slightly and such a slight trend of economic growth is expected to happen even during the second semiannual of this year due to a possible negative effect of the Greek crisis in country’s economy.
But the effects will be felt mostly in the decrease of remittances and trade activity, but the domestic financial system will not be affected, is cited in Bank’s report. As foreseen, these effects will be transitory in country’s economy.
The economic growth will be in higher rates in the two upcoming years, according to Bank’s report since the banking system will have a positive balance and the business climate in overall is expected to improve significantly. These developments will boost the external and domestic demands, says the report.
News source/photo credits: ATA