BANK OF ALBANIA

PRESS RELEASE
Launching of the EBRD Transition Report 2017-18

Publication date: 11.04.2018

 

On 11 April 2018, at the premises of the Bank of Albania, the EBRD Transition Report 2017-18 was presented.

In his opening remarks, the Governor of the Bank of Albania, Mr Gent Sejko, highlighted that the Transition Report this year addresses some of the many issues for transition economies such as the convergence of productivity and dynamics of firms, importance of road infrastructure to economic growth and the new opportunities that the green economy may provide.

The report assesses the region's developments positively. After several years of anaemic growth, finally the region shows recovery of the economic activity and the prospects remain positive, notwithstanding the geopolitical concerns and the internal and external challenges we face. Some regional countries grew faster than other countries of the same development stage and size. Capital inflows have been relatively considerable, driving to the narrowing of the interest rates spread in the region with those in larger economies. It seems that inflation is gradually returning to target levels and the accelerated economic growth in Western Balkans is supported by bank lending and by some major projects in infrastructure.

Nevertheless, the Report notes that productivity growth slowed down; hence, the dynamics of private firms are identified as one of the main issues that should concern our region. In this regard, Governor Sejko said that the Bank of Albania deems that the development of the financial system is essential for the country's economic development. Therefore, through our policies, we are trying to encourage a more efficient allocation of bank lending, in order for it to be as less fragmented or concentrated in certain sectors of the economy.

Productivity is important as it determines the convergence speed toward the advanced economies. The Governor said that “…the regional and Albanian authorities should continue the implementation of the structural reforms, which aim to:

  • Increase the formalisation level of the economy, as a tool for raising competitiveness, for encouraging the consolidation, for improving the governance of firms and for lowering their financial costs;
  • Promote the development of firms in fields where the region and Albania provide competitive advantages, such as tourism or the agro-industry, and in fields that have high value added, such as the information technology or the financial services.
  • Develop capital markets, as a tool to support the new, innovative firms and at the same time as a partner to share the financial risk of entrepreneurs is the stage of the expansion and development..”

Regarding the future, the Report assesses the reforms undertaken by the Albanian authorities positively. The macroeconomic environment is stable and prospects show positive growth pace will be maintained.

The Report also shows that the projects and investments in infrastructure have supported the increase of the Albanian economic integration with regional countries, providing a positive effect on higher productivity and more opportunities.

Concluding, Governor Sejko highlighted that the Report suggests that it is time for the financial system to focus on the firms, as the basis of employment, innovation, productivity and economic growth.

Governor Sejko thanked the EBRD representatives for the valuable contribution and concrete support through financial investments in key areas for the economy of Albania, and invited them to continue considering the potential that Albania has to offer.

The high representatives of the EBRD presented the EBRD Transition Report 2017-18, as well as the assessments on the Western Balkans and responded to the interest of the attendees.