Plan against bad loans, IMF: Reducing them is critical for not damaging the economic growth”

17/03/2015 00:00

The Government and the Bank of Albania are planning a special plan for resolving the stalemate of bad loans.

Shkelqim Cani, Minister of Finances, declared: “We have an agreement regarding the way how we will influence problematic loans in the future”.

Gent Sejko, Governor of the Bank of Albania, declared: “There is a very serious commitment from the Bank of Albania and the government. we have decided to address to the problems of bad loans. We must help banks and the economic growth”.

Albania is among the countries with the highest level of bad loans in Europe, with 22.8% of the total. The Head of the IMF, Nadeem Ilahi, said that reducing them is critical for not damaging the recovery of the economy.
“The credit for the economy is growing, but with a slow pace. There is the problem of bad loans, which hampers the progress of banks and makes them hesitating to credit the private sector. This is why we support this coordinated plan between the government and the Bank in order to resolve this problem that is now old. We think that this will improve the crediting environment in the economy”.

The IMF did not change the 3% prediction for the economic growth in Albania, although they admitted that the risks for this scenario have been increased:

“We see the 3% level as doable. Certainly, we have analyzed the effect of the flood and the slowdown of the oil economy, which pressures the growth. But low oil prices, the recovery of the demand and the return of trust in the private sector, the growth of loans and the low interest rates, everything suggests that the economic growth will be like we had planned.”

Arben Ahmetaj, Minister of Economic Development, Trade and Enterprise, declared: “The main motor for guaranteeing this growth will be the deepening of the structural reforms. Beyond the pleasure that these reforms are giving it’s fruits, it is the moment to believe and think for deepening the structural reforms”.

The Head of the IMF supported the government plans for orienting the loan in foreign markets and towards longer debt terms.

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