TIRANA, Oct 7 /ATA/ The Supervisory Council deems that pandemic effect on the economy will be reducing in the upcoming quarters.
The growth in aggregate demand is expected to be accompanied by an increase in employment, wages and production costs, by supporting the convergence of inflation to target within 2022.
The Bank of Albania governor Gent Sejko said that the global economy is going through the most severe test in the last decades, Covid-19 pandemic.
The drop in economic activity, across many countries is in double digits, unemployment grew, while the financial situation of private sector worsened. The exceptional fiscal and monetary measures have alleviated the impact of pandemic, but the recovery outlook still remains surrounded by uncertainty, Sejko said
According to him, inflation in Albania averaged 1.3%, in July and August, down from the second quarter. This fall has reflected the lower inflation rates in food items and in some services categories. From the macroeconomic perspective, the inflation slowdown reflected the gradual fading out of the effect of supply-side shocks, and showed a more completed declining effect of aggregate demand in Albania and abroad.
According to INSTAT data, the economic activity in Albania recorded an annual fall of 10.2% in the second quarter. This fall reflected the negative contribution of almost all sectors of economy and of the aggregate demand components. In parallel, employment recorded an annual fall of 3.6%, while unemployment rate was up at 11.9%. Data of the third quarter are still preliminary. Nevertheless, the better performance of both tax revenues and exports, in addition to the improved business and consumer’s confidence, suggest that the economic fall has continued, although at a slower pace than in the second quarter.
Sejko said that monetary and financial stability in Albania are a positive premise for the recovery of economy and an essential precondition for its stability in time.
/r.e/sm/
