Credit Support Key for Economic Recovery, Sejko Says

TIRANA, June 24

Economic growth in Albania is expected to continue, but the lack of credit support might hinder further recovery. Governor of the Bank of Albania (BoA) said this during Fifth Financial Forum held on Thursday by BoA and the International Monetary Fund (IMF).
“The economic recovery over the short-and medium-term is expected to get a boost due to the growth of private demand and a further stimulus generated by the increase of exports,” Governor Sejko said.
Yet, he highlighted that the lack of credit by second-tier banks might pose a risk economic revive.
The debate on the reasons why banks don’t increase lending is old, but this is the first time that BoA made second-tier banks accountable for this issue.
“Second-tier banks have to be more far-sighted and flexible concerning lending policies. We call on you to promote Albania among your banking groups. We are aware of the fact that risk perception is more negative compared to the reality in Albania. This affects the country because most of the important lending decision are taken by the central institution,” Sejko underlined.
According to BoA’s data, bank lending in April was 92 million dollars less than one year ago. In the meantime, experts from IMF said that Albania’s economy would benefit more if banks unblock lending.
Despite this issue, the government seems to have an optimistic point of view on the economy.
Minister of Finances Arben Ahmetaj declared the Albania has definitely left the economic crisis behind. He also added that if reforms will continue, the economic cycle will be positive for the five-eight upcoming years.
On her part, Minister of Finances Milva Ekonomi pointed out that new sectors such as agriculture, the agro-processing industry, manufacturing, tourism and transports may lead Albania’s economic growth.
The rates of economic growth that IMF and the Albanian government foresee for 2016 reach up to 3.4 percent. Meanwhile, BoA figures are more restrained as it expects that national accounts will expand by 3percent.

News Source/ Photo Credit: BoA