Loan crisis deepens
31/05/2013 00:00
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The financial market has entered a complete stalemate. Recent Bank of
Albania data show that the annual credit growth for the private sector
almost went to zero.
Numbers show that this is the first time that credits for business and individuals falls to zero, since 2002, when the Bank of Albania started publishing detailed loan data. This stalemate is deepening the economic crisis consequences even further.
The strong credit slowdown last year was the main reason that halved the economic growth from 3% to 1.6%. Chances are that the credit pressure over the further slowdown of the economic growth will be even stronger for this year.
Only yesterday, the observing council of the Bank of Albania made an official warning that the credit crisis will continue even in an mid-term period.
Reasons for reduced credit
Bregasi: Government to be blamed for mistrust relations with banks
Business asys that there are a series of reasons why business loans are falling so quickly. According to the Business Albania president, Luan Bregasi, the government has its part of blame for the mistrust climate that has been created between banks and businessmen.
“The government pays its own loans in banks, but they don’t pay the businessmen, and puts them in difficulties with the banks”, Bregasi declared.
But what consequences has the shrinking of funds for the private sector? Mr.Bregasi says that this could bring the economic growth into a recession.
Blocked loans for the private sector devaluates all Bank of Albania efforts to stimulate the economy.
The decreased interest norm has worked only for one side, the loans taken by the government. As for the private sector, the mechanism that transmits monetary policies is out of function.
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