Loans in their historical minimum

But this is the total loan figure, which includes the loans towards the public and financial sector. Without these loans, the loan for the private sector has an even smaller growth. According to the data, the loan for the private sector by the end of August was 520.7 billion ALL, only 4.8% more than one year ago, which is also the historical minimum.

This economic slowdown started after the first trimester, and the plunge became steeper in the recent months. As never before, loans not only have not increased in the recent months, but it has fallen. This situation is related with two factors. First of all, banks are obliged by the EU conditions and the risks they percept to decrease their exposure in the Albanian economy, by reducing loans for the government and the private sector too.

On the other hand, the request for loans has also fallen because of the crisis. Individuals feel insecure and have reduced consumption, while the business hesitates to make new investments. This is another signal for the bad situation of the economy, since it fades away the hopes for a possible revival of the consumers demand and the investments in business. The Albanian bank has already reduced the basic interest rate to the lowest historical level of 4%.

But the data that come from the financial market show that the stimulus is failing to revive the consumers’ demand for goods and services, or to unblock the loan stalemate, in a time when businesses complain of not having liquidity in the market.

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