The challenges that Albanian economy is facing

The challenges that Albanian economy is facing

Analysis/International Monetary Fund led by Mr. Nadeem Ilahi, along with Albanian authorities of the Ministry of Finance, Ministry of Economic Development, Tourism, Trade and Enterprise and the Bank of Albania, analyze Albania’s economic situation and the challenges that it faces

Tirana, 1 July 2015/Independent Balkan News Agency

Ministers Shkelqim Cani, Arben Ahmetaj, Governor of the Bank of Albania, Gent Sejko and head of IMF for Albania, Nadeem Illahi, make an analysis of the performance so far and the impact of the situation in this year’s expectations for the economic and financial development of the country.

They say that the program for the consolidation of the economy and finances of the country is on the right path.

Cani: Economic recovery dropped, a growth is expected in the months to come

Minister of Finance, Mr. Shkelqim Cani says that in the first half of the year, Albanian economy encountered several difficulties such as bad weather in agriculture and the weakening of foreign demand from EU countries.

According to him, these difficulties slowed economic recovery down.

The minister is optimistic that the consolidation of the economic recovery will strengthen in the second half of the year.

“Bearing in mind the improvement of the financial situation of the economic environment, the continuation of the process of the payment of outstanding debts to businesses, the growth of consumption and demands for investments in the second half of the year, we believe that economic growth will meet the initial projection of 3%”, Cani says.

According to him, the growing curve of domestic economy will continue to gradually accentuate, aiming a 3,5% growth in 2016 and 4% in 2017.

But where will economic growth be based on? Minister of Finance says that the growth of domestic demand-based on the return of confidence-low interest rates, direct foreign investments (the implementation of major economic projects is expected to take place now) and the gradual return of lending, will be the main elements which will help in the projected growth.

Sejko: Albanian economy is able to face extreme blows

Governor of the Bank of Albania, Mr. Gent Sejko says that although the external environment looks challenging, the financial system in the country is able to face even extreme blows.

Mr. Sejko says that the Albanian economy is following a positive development curve, in spite of the blows that it has sustained in the first half of the year.

“Economic and financial indicators of the country are healthy. The banking system is liquid and well capitalized, public debt of the country is under control; the financial situation Albanian businesses and households is improving. The long term development sources of the country remain sustainable”, Mr. Sejko says.

Ilahi: Albania’s economic program continues to see progress

Head of IMF Mission to Albania, Nadeem Illahi says that “Albania’s economic program continues to see progress”.

According to him, economic growth is expected to continue modestly in 2015, at rates varying from 2,5% to 3%.

“Economic growth will be boosted by sustainable recovery of domestic demand, the continuation of direct foreign investments and a gradual growth of banking lending. Inflation is expected to remain low, partially because production continues to be under potential”, Mr. Ilahi says.

The head of the Mission, who visited Albania from 17 to 30 June 2015, suggests that monetary policy will continue to support economic recovery, in line with the Bank of Albania’s mission to preserve the stability of prices.

“The increase of lending is reviving, but it continues to remain low, as it is affected by the high level of nonperforming loans and weaknesses in the domain of the execution of contracts”, Mr. Illahi says.

Ahmetaj: Special strategy for nonperforming loans

Minister of Economic Development, Tourism, Trade and Enterprise, Arben Ahmetaj says that Albanian economy will continue its efforts to improve sustainable economic growth and to meet the annual objective of 3%, although a lower growth rate has been projected, up to 2,7%.

Ahmetaj says that a strategy is in place to treat, reduce and discipline nonperforming loans. This strategy will be announced in the coming days.

“In the next 10 days, the government along with the Bank of Albania, will officially announce the strategy drafted with the International Monetary Fund and World Bank”, Ahmetaj said.

According to him, this strategy will lead to a significant drop of nonperforming loans. Ibna/