Hopes for substantive growth rates for Albania were smashed again due to slow progress of the structural reforms, country Central Bank announced on Wednesday.
The Governor of Bank of Albania Gent Sejko, said in a press conference that his institution had revised downwards its forecast for growth to 3 per cent for this year, from the previous 3.4 per cent, due to weaker than expected consumption and inflation rates.
Some analysts were alarmed earlier this year by very low inflation rates in the country. Year on Year inflation stood at 0.2 per cent in February and 0.3 per cent in March. The National Institute of Statistics announced also last month that the final consumption in the country fell by 0.5 per cent, the first yearly fall registered since 1998.
Bank of Albania cut its main interest rate to 1.5 per cent on Wednesday from 1.75 per cent, hopping it will help to revive consumption. However, Sejko warned that much of the problem lies to the country government and slow pace of structural reforms.
“The Supervisory Board finds appropriate to stress that the expansionary monetary policy is a necessary though not sufficient precondition to generate faster and sustainable growth rates. But this policy has to be accompanied by faster pace of structural reforms in the economy,” Sejko said.