Albanian economy grows below potential: central bank head

The Albanian economy continues to remain below potential despite its high growth rate in 2014, Albanian Daily News quoted the governor of the Bank of Albania (BoA) as saying on Thursday.

Gent Sejko made the remarks when he spoke of the BoA's 2014 annual report at the Parliamentary Committee of Economy and Finance.

He said that the BoA's lowering of the interest rate and focusing on lending, especially on bad loans, have been appropriate for a risk-free economic environment.

He said the Albanian economy grew by 1.9 percent in 2014 against 2013, when it grew 1.5 percent.

"Despite the highest rate of growth, the Albanian economy continued to remain below potential. This situation has led to a full utilization of production capacities and has dictated unemployment rates beyond the equilibrium." the BoA head was quoted as saying.

Sejko added that economic growth was supported by rising domestic demand and increase of economic activity, which was driven by improvement in the balance sheets as well as the growth of consumption and private investment.

"In the opinion of the Bank of Albania, aggregate demand is the main problem of the Albanian economy," said Sejko.

"In coming years, the Albanian economy is foreseen to move in an upward trajectory," which would enable the economy to return to balance and inflation to fall within target in the medium term, Sejko added. Endi