Economic Growth Higher than Forecast

TIRANA, August 3

The Albanian economy performed better during the first half of the year. This was confirmed by the Governor of the Bank of Albania (BoA) Gent Sejko during the press conference he held on Wednesday on the monetary policy decision of the Supervisory Council of BoA.
Overall, the performance of the economic activity followed the expected trend, but the growth rate was higher than our projections.
“Overall, the performance of the economic activity followed the expected trend, but the growth rate was higher than our projections. According to INSTAT data, the Gross Domestic Product increased by 3.9% in the first quarter, reflecting the positive contribution of almost all the constituent sectors and branches. Indirect available data suggest positive growth, though in slight moderation, in the second quarter,” Sejko highlighted.

Further on, he added that private consumption and investments continued to grow in the first half of the year, on the account of favorable financing conditions, improved confidence in the economy, increased employment and continued high Foreign Direct Investment (FDI) flows.
Sejko added that the Albanian economy is gradually approaching its potential level, as reflected both in the decline in the unemployment rate and in the medium-term trend of the increase of the production capacity utilization rate.
Therefore, such cyclical improvement will enable a gradual increase of wages and convergence of business profit margins with the historic average.
“Judging from the actual trends of the economic performance, and determining factors in both the internal and external environment, the Bank of Albania deems that economic growth will continue in the medium term,” the governor stated.
In the meantime, the Supervisory Council decided to keep the key rate unchanged, at 1.25%.

News Source: BoA