Financial Stability Report 2015 H2

In the second half of 2015, economic activity expanded, driven mainly by the positive contribution of private investments and net exports. The performance of public investments and private consumption was weaker. Economic growth has not been translated in lower unemployment as yet. Fiscal policy continued its consolidating trend and budget deficit was mainly financed through external financial sources. The accommodative monetary policy was reflected in the fall of the average interest rates applied to the borrowing in the interbank market, money market, banking products and the government debt securities. Volatility of the domestic currency exchange rate was low, reflecting the developments in the international markets and the changes in the demand and supply for foreign currency in the domestic market. Both the primary market of government debt securities and the interbank market performed in line with expectations, supported by the necessary operations for liquidity management by the Bank of Albania. Worldwide, authorities continued the efforts to boost crediting and economic growth maintaining low interest rates and ample liquidity conditions. Nevertheless, international markets reflect instability, attributable to the sluggish economic growth in the advanced economies and the weakness in the emerging economies.