BoA Keeps Key Rate at Record Low and Nitpicks Govt over Investments

TIRANA, October 6

The Bank of Albania (BoA) confirmed that the key rate will remain unchanged at the record low of 1.25percent after the Supervisory Council reviewed the most recent economic and monetary developments. Governor Gent Sejko stated that the new information scrutinized in the interim monetary policy report met the expectations of the bank, yet he gave no hint on a possible future key rate hike.
Sejko mentioned a positive rate of expansion in economic activity while the inflation rate increased and financing costs remain at their historic low. Moreover, BoA says that the government must be more careful concerning public investments. According to BoA, a uniform distribution of budget expenses would increase their efficiency and reduce fluctuation in economic and financial indicators.
The central bank foresees a progressive improvement of economic activity for the two upcoming years. Such improvement will help to bring the Albanian economy to equilibrium during the second half of 2017. The consumer index price reached the level of two percent during August 2016 due to an increase in the price of food and oil. Current data suggest that the Albanian economy continued to climb during the second and third quarters. The favourable financial activity, the increase of employment, and high foreign direct investments (FDI) inflow helped to increase consume and private investments. BoA says that these components will be in the lead of economic growth during the last quarter.

News Source: monitor