TIRANA, July 6 /ATA/ – The Bank of Albania’s updated baseline scenario forecasts suggest that the country’s economy will maintain solid growth rates over a medium-term horizon,” central Bank governor Gent Sejko said Wednesday.
Speaking at a press conference on the monetary policy decision by the Bank’s Supervisory Council, Sejko said that “growth rates will however decelerate compared to the first quarter of year, but will nevertheless be sufficient to preserve the Albanian enterprises and households’ balance sheets.”
Sejko underlined the performance of the economy remains subject to serious challenges.
“The combined effect of elevated prices in international markets, the tightening financial conditions, and the expected economic slowdown in the Euro Area, coupled with lower household purchasing power, is expected to weigh in opposite directions on economic growth and inflation rates in Albania,” he said.
Sejko said that according to INSTAT data, Albania’s GDP rose almost 6% in the first quarter of 2022.
“This growth rate outturn was on the upper levels of our expectations and reflected higher consumption, private investments and exports of goods and services. On the other hand, lower public investments and higher imports have contributed negatively to growth,” central bank governor said.
Sejko underlined that higher demand for goods and services was reflected into a further expansion of employment and wages in the first quarter, providing an additional factor to the accelerating inflation rate.
“According to official data, unemployment fell to 11.3% in 2022 Q1, while wages in the private sector expanded by 10.5%. While administrative measures undertaken to increase formalisation in the labour market have positively impacted the evolution of wages, the fast wage growth rate suggests that labour force shortages in the market are exerting increasing pressures on production costs in Albania,” he concluded.
/r.e/u.sh/
