Business in Albania worried on the level of inflation and bad loans

Business in Albania worried on the level of inflation and bad loans

Tirana, March 17, 2014/Independent Balkan News Agency

Business sector in Albania is worried about deflationary pressure on national economy, saying that it has serious consequences for them and domestic production industries.

Konfindustria (Confederate of Industries of Albania) says that 1.8% inflation in the month of February 2014 was a clear indicator of deflationary phenomenon which is negative for economic development.

Commenting on these indicators, Gjergj Buxhuku, General Administrator of Konfindustria says that they “directly reflect a drop in domestic demand as a result of the constant drop of remittances, public investments and lending in the economy in an all time level”.

Another negative phenomenon, says Mr. Buxhuku, consists in the growth of the number of “bad” loans for the month of February, amounting to 24,1% of the general portfolio with a nominal value of 1 billion USD.

“The direct consequences of deflation in the economy relate to the fall on domestic production, increase of the cost per unit, drop in the level of competition of domestic industries and increase of unemployment”, says Mr. Buxhuku (photo).

Konfindustria praises the payment that the government is expected to make for debts owing to businesses as part of the loan issued by IMF.

But, Mr. Buxhuku says that it’s not sufficient to be based on monetary policies alone.

“It’s not sufficient to base economic growth on monetary policies alone, judging by the way that the economic system in Albania has been built. The government is required to undertake professional measures in order to stop funds leaving the country ,in order to attract foreign investments by opening closed-monopoly markets and the use of strategic projects for the activation of the capital market”, suggests Mr. Buxhuku. /ibna/