The governor mentions the threats coming from the European economy, but also threats coming from the currency exchange rates or the tense political situation in the country
Although the country’s economy is expected to perform well in the months to come, it needs time to find equilibrium.
This has been confirmed yesterday by the head of the central bank, Gent Sejko. According to him, this is a direct result of the negative factors coming from European economies and other domestic factors such as currency exchange rates, etc.
“Albeit the positive performance of the economy, for 2018, annual inflation averaged 2.0%, remaining unchanged from the previous year and undershooting our 3% target. Inflation reflected the effects from two developments in opposite directions: the build-up in domestic inflationary pressures, generated by the rise in employment, wages and production costs, was offset by the rapid appreciation of the domestic currency”, said the head of the central bank.
According to him, “threats are present. They mostly relate to the external environment, but also with the impact that the appreciation of the domestic currency will have on inflation”, the head of the central bank said. Meanwhile, Sejko also said that the threats that the Albanian economy is facing are also related to “the tense political situation in the country”.
In spite of these warnings, Sejko has confirmed that the outlook remains positive and for this reason, the Bank of Albania Supervisory Council decided not to change base interest rate on lek, leaving it at 1%. “Meanwhile, the Bank of Albania is ready to react against any shocks”, the head of the central bank concluded.
INSTAT: Prices are being kept under control
Consumption prices are being kept under control. This was confirmed by experts of the Institute of Statistics. According to this office, consumer price index in April grew by 1.4%, while the Bank of Albania’s target for inflation is 3%. Meanwhile, last year, price increases for April has been higher, namely 2.1%. According to the Bank of Albania, this has to do with the recent fluctuations in the domestic money market and the falling inflation in partner countries.
“Price increases in April were mainly affected by ‘Food and non-alcoholic beverages’ with +0.97%, followed by ‘Rent, water, fuel and electricity’ with +0.25%”, INSTAT experts confirm.