BoA: Economic Growth is going from investment towards consumption
This year economic growth will rely more on consumption and less in investment and exports.
Bank of Albania forecasts set the renewal of private sector consumption as the most determinant factor in the expansion of national output.
The annual growth rate of consumption in the first quarter 2018 was 3%, from 2.7% the previous year’s average.
Consumption contributed 62% in the formation of domestic demand.Other quantitative data showing the growth of private consumption in the second quarter are the increase in value added tax revenues and the increase in the import of foodstuffs.
Starting from the fourth quarter of 2016, private consumption has marked a slight but steady growth trend. According to the Bank of Albania, consumption growth has been supported by the gradual expansion of employment and labor income, improved confidence, and increased consumer credit and eased financial conditions.
The overall investment performance in the economy was also positive in the first quarter. They grew by 5.4%, close to the historical average of the last two years. The Bank of Albania estimates that investments grew both from the public sector and gross capital formation of businesses.
Indirect indicators for the second quarter suggest a continuation of investment growth, but at lower rates than in the first quarter. Expectations for slow growth of investments are based on indicators such as public sector capital expenditures, machinery and equipment imports, and investment loans.
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