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Expert says Albania faces deflation: report

Xinhua, March 16, 2016 Adjust font size:

Albania is facing deflation which will have negative impact on businesses and government, an economist told to local media.

Albanian businesses are profiting less from their sales due to falling prices, and the government has difficulties in offering the tax stimulus that was expected by many, said Arjan Kadare, former head of the oversight committee of the Bank of Albania, Albanian Daily News reported on Wednesday.

Kadare suggested the government come up with a temporary short term tax stimulus to pull the country out of the negative economic spiral.

The economist opposed the change of the value added tax which remains at 20 percent, saying a change may put the biggest source of government income at risk. But he noted that other taxes may be changed as some economic boosts are required.

The Bank of Albania has said the country's inflation will remain a falling tendency in the medium term, while some other factors, such as improvement of economic activities and positive signals against deflation pressure on foreign markets, will help inflation return to normal levels, according to the Independent Balkan News Agency. Endi