TIRANA, Aug. 15 (Xinhua) -- Albania's economic growth slowed down in the first half of 2019, Governor of the Bank of Albania (BoA), Gent Sejko said on Thursday during the presentation of the quarterly monetary report of 2019.
According to Sejko, the Bank of Albania continues to expect the pace of growth to improve in the medium term, improvement which will contribute to the return of the economy to equilibrium.
Sejko declared in the second quarter of this year, the average annual inflation stood at 1.4 percent, against 1.6 percent registered in the previous quarter.
"According to the data of the National Institute of Statistics, the Albanian economy grew by 2.2 percent in the first quarter, which reflects a significant slowdown in the pace of growth, compared to both the previous quarter and the same quarter in the previous year," Sejko said.
According to the governor, the slowdown is mainly attributable to a drop in electrical energy production due to unfavorable weather conditions. This factor had a negative effect of 1.6 percent on economic growth in the first quarter of this year and is expected to remain present during the rest of the year.
The drop in electrical energy production, according to the BoA, will lead to a temporary slowdown of growth during 2019, but this factor does not have an impact on medium and long-term trends of economic growth or production costs.
Sejko noted that the tense political climate in the country in this period did not favour consumption and private investments.
"Interest rates on credit remained near historically low levels in the second quarter of 2019, enabling a further improvement of lending, both in the acceleration of credit growth at 6.8 percent, and expansion of the base of this growth," the governor said.
Moreover, Sejko added that the Albanian economy is expected to return to equilibrium in 2020, creating premises for faster increase in wages and domestic production costs, whereas the inflation is expected to converge to target in the second half of 2021, underpinned also by the expected stabilization of the nominal exchange rate.