Where did Albanians’ savings go in 2016?
An environment with extremely low interest rates in Albania has posed for years a challenge to the investment of savings of households.
According to official statistics, bank deposits have remained the main instrument of investment, but in recent years there is a growing weight in alternative investments with low risk.
Based on data from the Bank of Albania, at the end of last year, total deposits of individuals amounted to ALL 904 billion, growing by ALL 25 billion or 2.9% compared with a year ago.
The increase was driven especially by foreign currency deposits, which accounted for over 80% of the total growth.
Individual investments in bonds and treasury bills of the Albanian government have also continued last year.
According to data from the Ministry of Finance, individuals owned 15% of the stock of government debt.
In absolute terms, this translates into an investment worth around 80 billion at an annual growth of 3.3%.
Financial investments of individuals, December 2016 | ||
Instrument | Amount (ALL bln) | Annual increase (%) |
Bank deposits | 904 | 2,9 |
Bonds and treasury bills | 80 | 3,3 |
Investment funds | 65,4 | -2,3 |
Pension funds | 1,25 | 47 |
Meanwhile, investment fund shave suffered a setback over the past year.
According to data from the Financial Supervisory Authority, the net assets held by individuals in these funds fell to ALL 65.4 billion, 2.3% less compared with the end of 2015.
The best performing investment of individuals for last were private pension funds.
According to FSA data for 2016, investments in these funds amounted to ALL 1.25 billion in an annual growth of 47%.
Although still holding a very small share in the investment portfolios of individuals, interest rates on these instruments are growing, favored by an improvement in awareness, but also partly due to low interest rates.
SCAN
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