Experts say that measures taken by the Bank of Albania for pulling the
economy out of the crisis are dimmed by the high level of individual and
business insecurity.
“It is due to the level of insecurity that commercial banks have in Albania. It is due to the quality of demand, as regards loans by business plans or possible investments. It is also due to the doubts and unclear situation of the Albanian economy for the next two or three years. Not only as regards the crisis, but also regarding the way how some main sectors will be in the future, in short or long term”, says Adrian Civici, expert of economy.
Bank of Albania reduced the basic interest rate seven consequent times, in order to stop a stronger economic slowdown. But as the Bank admits in the monetary policy report, the effects have been weak. Civici says that there are only two solutions remaining, and the first one is taking measures addressed to the source of the problem.
“We have a series of stalemates, starting from the property issue. We have legal and fiscal policy stalemates that have the tendency to change often. We have the government’s obligation to businesses, a series of due payments that have blocked the economy. We have the stalemate of macro-prudential measures of the Bank of Albania, and of the banking system for reducing the bad loans”, Civici declared.
The second option, according to him, is related to the usage of the budget for reorienting the economy from consumption to the producing sectors.
“With the new debt or the foreign direct investments, or through other ways of financing, we may give encouragement to the producing sector and the Albanian economy, in order to start the big change that we have mentioned so often. Turning from a consumption economy, to a producing economy, starting with agriculture, agro-industry, mining, construction sector and everything else that involves production and export”, Civici declared.
While the basic interest rate has decreased in the lowest historic level of 3%, the loans for economy keep shrinking by slowing down consumption and private investments.
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