Albania’s economic growth has strengthened in 2014, says the World Bank

“Economic growth in Albania has strengthened in 2014”. This was the declaration of the World Bank in the framework of the economic report for Southeast Europe.

According to this report, 2014 had an external environment which didn’t favor growth, but growth mainly came from consumption and private investments.

“The growth has come in circumstances of the consolidation of tax policies, in the domain of revenues and investments. Solvency conditions have improved. Another aspect relates to the revival of lending in 2014, but interest rates continued to be low. Economic growth has a tendency to continue and be stronger”, reads the World Bank report.

The report says that economic growth amounted to around 1% and this growth has gradually strengthened, while adding that there’s a tendency for improvement of the economic activity and growth has included all sectors excluding transport.

“As far as contributions are concerned, the biggest contribution has come from private sector, something which has been reflected in the current account and which in 2014 has extended. As far as the funding of current accounts is concerned, a part of them has been funded by direct investments”, reads the report.

According to the report, the labor market has improved, while fiscal consolidation has continued.

Fiscal contribution is expected to be higher in the third quarter of the year. As far as inflation is concerned, World Bank says that it was low and affected by low pressures of import prices. Based on the report, inflation has also decreased as a result of the fall in the price of oil.

“Lending has started to revive in spite of existing problems. This has also come as a result of the demand for loans by consumers and the facilitation of lending standards by banks. Nonperforming loans amount to 25% and this is still a high percentage. Business climate in Albania has significantly improved. This improvement makes us positive for the future. Fiscal consolidation is also expected to happen in the medium term”, reads the report.