TIRANA, Oct. 7 /ATA/ – Lending to Albania’s private sector continued to expand rapidly, rising 15.4% year-on-year in July-August, while the ratio of non-performing loans fell to 3.7%, its lowest level since the global financial crisis.
Financial markets continue to be characterised by ample liquidity, low interest rates and positive lending conditions, Bank of Albania Governor Gent Sejko said on Wednesday.
“This trend has been reflected in the rapid and broad-based expansion of credit to the private sector,” Sejko said, noting that lending continued to support business investment, home purchases and household consumption.
Private-sector lending is increasingly shifting towards Albania’s national currency, lek, while portfolio quality indicators continue to improve, he said.
On inflation, updated Bank of Albania forecasts suggest price growth will increase further over the next two quarters, but the rise is expected to be moderate and temporary.
Inflation is projected to gradually return towards the central bank’s target from mid-next year.
Economic activity is also expected to continue expanding at a steady pace, close to potential, supported by private-sector balance sheets, favourable financial conditions, tourism revenues and positive expectations.
The central bank said geopolitical tensions in the Middle East remained a key source of uncertainty, potentially affecting commodity prices and, in turn, inflation and economic growth.
The Bank of Albania’s Supervisory Council decided on Wednesday to keep its overnight deposit rate unchanged at 1.5% and its overnight lending rate at 3.5%.
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