Albanian economy more optimistic than expectations: BoA report
Economic and financial developments in Albania are positive and confirm the growing trend of the Albanian economy.
The economic activity has continued to grow steadily at the beginning of 2017, but inflation slowed down in the second quarter.
Financial markets are quiet and the private conditions of sector financing have improved.
The alleviating monetary policy continues to be essential in improving financing conditions, which have supported investment and consumer growth, thus creating the premise for increasing inflation near the target levels.
This is the assessment that the Central Bank for the country’s macro-economic situation.
BoA experts, during a presentation of the Quarterly Monetary Policy Report, estimated that the new information for economic growth was more positive than expectations, while the inflation value was somewhat lower.
“In our estimation, the factors that have affected these developments are of a temporary nature, without affecting the direction and intensity of the expected developments over the medium term. The Bank of Albania expects further improvement of the economic growth in the medium term, which will create the conditions for growth and return of inflation to the set target within 2018,” notes the report.
Meanwhile, based on the actual data, the Supervisory Council has judged that the intensity of the monetary stimulus will not decrease before the second quarter of 2018.
The fall in inflation in this quarter was partly influenced by the high inflation rates recorded in the first quarter as a result of shocks in supply, and, in part, by the declining effect of exchange rate appreciation.
According to BoA experts, these shocks will have a transitory impact, while gross domestic product grew by 3.9% per annum, driven by higher output in all sectors of the economy, as improving funding sources and strengthening of the confidence of economic agents have supported the growth of private sector demand.
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