New loans during the past year have reached record levels. Individuals and businesses received ALL 318 billion from banks, an increase of 10.7% compared to a year ago, despite the fact that the Bank of Albania has raised interest rates.
Meanwhile, the credit of the economy, which is measured as the total Bank portfolio has seen an annual increase of 4%. However, the strongest growth was among individual loans compared to businesses, is the most worrying phenomenon for experts.
“We see that we have more of an increase in individual loans, that is, family loans in comparison to business loans. This is explained by the economic situation as a whole, the difficulties of families to cope with their consumption or utilitarian expenses due to the entire economic situation ” – says economist Igli Tola.
He further admits that increasing the circulation of money in the economy can have negative effects on inflation.
“This breath of credit both for businesses and individuals, both in relation to consumption and investments, on the other hand, will bring more economic activity, which will also translate into a stimulation of inflation.”
Experts think that in 2024 there could be another increase in the interest rate of the lek that would directly affect all loans.
“They are more frugal compared to the 18 months we left due to the stabilization of the market situation as a whole, but I do not see it impossible that during this year the interest rate will change at least once. I don’t believe it will be the same situation as last year, when growth was gradual and occasional.”
At the last meeting, Bank of Albania decided not to raise interest rates, keeping them fixed at 3.25%, one of the lowest levels in Europe and the region.
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