Albanians consume less

After the hit taken in the first trimester of 2009, consumption was temporarily increased until the end of 2010, turning back to another plunge in the first trimester of 2011. Data show that consumption was reduced for main basic goods, more precisely, food. One of main reasons is the strong price hikes experienced in the last three years. According to official data, the food prices have increased with at least 7-8% each year.

In the last report of monetary policies, Central Bank of Albania experts listed a series of reasons that have made Albanians spend less. Besides the price increase, some of these reasons are connected to the income decrease and the citizens’ insecurity.

Part of the consumption was financed by families with revenues sent by their emigrated relatives. For almost three years, the remittances decreased with an average of 7-8% each year. Beside remittances, the consumer’s loan, another financial source that had been widely used in the recent years for financing purchases and for fulfilling everyday needs, in last year’s trimester was 1.4% lower than the same period of one year ago.

However, the income decrease, according to the Bank, can only partially explain the consumption plunge. Another reason is that the consumers are changing behavior, due to the high economic insecurities.

The bank says that families prefer to save more and spend less. For many years, the demand increase for consumption goods has had a high ratio, and it has been considered as Albania’s generator for the economic growth. This was also confirmed when the consumption decreased in the last two years due to the crisis, and managed to cut in half the economic growth.

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