Albania Cuts Interest Rates to Boost Growth

“The reduction in the interest rate is being carried out while inflationary pressures are under control,” the Central Bank governor Ardian Fullani said. 

“This move increases the monetary stimulus and will boost economic activity in the country,” Fullani added.

The Bank's decision comes among growing signs of difficulty in the local economy occasioned by a reduction in consumer demand and in revenues flowing into the budget.

“Demand from the private sector is low… due to low consumer demand,” Fullani underlined.  “Insecurity is directing Albanian consumers toward savings,” he added.

The International Monetary Fund, IMF, downgraded Albania's GDP growth forecast for 2011 on Wednesday from 3.4 to 2.5 per cent amid concerns about the impact of the euro debt crisis and sluggish demand for goods and services.

Albania’s economy is particularly exposed to the financial troubles in Greece and Italy, the country’s main trading partners, which also host large Albanian emigrant communities.