Albanian economy expected to fall in 2020: central bank governor

Albanian economy is expected to fall in 2020 as unemployment will increase, Central Bank Governor Gent Sejko has said.

Sejko made the remarks while addressing lawmakers in the parliament on the Annual Report of the Bank of Albania (BoA) for 2019 and presenting the current situation of the Albanian economy.

The governor called the current situation as “unprecedented,” adding that COVID-19 pandemic and the necessary measures taken to contain it have hit hard the Albanian households and firms during the last three months.

“Albanian economy is expected to fall during 2020, being accompanied by an increase of unemployment, a drop of households income, worsening of the financial situation of firms and increase of non-performing loans in the banking sector,” he told lawmakers.

According to Sejko, BoA in addition to easing fiscal measures, has undertaken “a complete package of measures to provide the needed liquidity to the banking system, boost lending and control debt servicing costs.”

The package consists of measures such as: reducing the policy rate at 0.5 percent, easing of bank regulations in providing temporary extension with two quarters of the payments of credit, eliminating the operational costs of electronic payment system and enhancing the operational capacities to guarantee the supply of economy with cash.

Sejko underlined that the coordinated fiscal, monetary and macro prudential measures have partially mitigated the negative effects of the pandemic, calling future challenges “serious.”

He noted that the current economic situation asks for all public actors and private sector operators to take discretionary, timely and coordinated decisions.

According to official data from the National Institute of Statistics, Albanian economy shrank by 2.5 percent in the first quarter, reflecting the decline in exports and investment.

In 2019, according to BoA, Albania’s economic growth stood at 2.2 percent.