volume 10 volume 10 number 3 number 3 September 2007 Economic Bulletin Economic Bulletin September 2007 E C O N O M I C September B U L L E T I N 2 0 0 7 B a n k o f A l b a n i a PB Bank of Albania Bank of Albania 1 volume 10 volume 10 number 3 number 3 September 2007 Economic Bulletin Economic Bulletin September 2007 Opinions expressed in these articles are of the authors and do not necessarily reflect the official opinion of the Bank of Albania. If you use data from this publication, you are requested to cite the source. Published by: Bank of Albania, Sheshi “Skënderbej”, Nr.1, Tirana, Albania Tel.: 355-4-222230; 235568; 235569 Fax.: 355-4-223558 E-mail: [email protected] www.bankofalbania.org Printed by: Bank of Albania Printing House Printed in: 360 copies 2 Bank of Albania Bank of Albania 3 volume 10 volume 10 number 3 number 3 September 2007 Economic Bulletin Economic Bulletin September 2007 C O N T E N T S Quarterly review of the Albanian economy over the third quarter of 2007 7 Speech by Mr. Ardian Fullani, Governor of the Bank of Albania At the signing of the Memorandum of Understanding with the Competition Authority. Tirana, 17 July 2007 41 Speech by Mr. Ardian Fullani, Governor of the Bank of Albania At the seminar “Does Central Bank Transparency Reduce Interest Rates?” Hotel “Tirana International”. August 22, 2007 43 Speech by Mr. Ardian Fullani, Governor of the Bank of Albania At the conference organized by the Central Bank of Bosnia and Herzegovina September 13, 2007 46 Speech by Mr. Ardian Fullani, Governor of the Bank of Albania At the regional meeting in Saranda, September 24, 2007 49 Speech by Mr. Ardian Fullani, Governor of the Bank of Albania To the press conference on the decision of the Bank of Albania Supervisory Council “On raising the interest rate by 0.25 percentage point, to 6.00 percent”. 26 September 2007 55 Speech by Mr. Fatos Ibrahimi, First Debuty Governor of the Bank of Albania At the European Finance Convention. 14 September 2007 56 Articles published in the Economic bulletins of 2007 61 Articles 63 Nationwide remittance beneficiaries survey 63 Real estate prices and financial stability 81 Bank of Albania news over July-September 2007 99 Legal events over July-September 2007 103 Bank of Albania management. 30 September 2007 107 List of all entities licensed by the Bank of Albania 108 Banks and branches of foreign banks 108 Non-bank institutions 112 Foreign exchange bureaus 113 Unions of savings and credit associations 122 Savings and credit associations 123 Representative offices of foreign banks 133 2 Bank of Albania Bank of Albania 3 volume 10 volume 10 number 3 number 3 September 2007 Economic Bulletin Economic Bulletin September 2007 T A B L E S Quarterly review of the Albanian economy over the third quarter of 2007 Table 1 Some main economic indicators in annual terms (in percentage) 10 Table 2 Contribution of items to annual inflation (in percentage points) 13 Table 3 Annual change rates of some PPI and CPI components of ‘Processed foodstuffs’ (in %) 16 Table 4 Accomplishment of the Bank of Albania quantitative objectives 19 Table 5 Imports and exports (in millions of EUR) and the annual increase by commodity groups 25 Table 6 Credit to businesses and households (average annual growth of quarters in %) 30 Table 7 Indicators of energy balance sheet 32 Table 8 Investment indicators 35 Table 9 Growth rates of income and spending (in percentage) and the fiscal balance 36 Articles Nationwide remittance beneficiaries survey Table 1 Geographical distribution of beneficiary households and remittances flow for 2006 67 Table 2 Regional distribution of remittances 67 Table 3 Income source of beneficiary households 68 Table 4 Contribution of remittances to household income (in percent) 68 Table 5 Daily income per capita (in ALL) 69 Table 6 Remittances impact on overall financial situation of beneficiary households 69 Table 7 Annual savings per household (in ALL) 69 Table 8 Descriptive statistics, annual remittances per migrant (euro) 70 Table 9 Annual remittances by relationship with the sender (in euro) 72 Table 10 Remittances frequency 72 Table 11 Remittances expectations 73 Annex Table 1 Summary report 77 Table 2 Remittances by countries of origin 77 Table 3 Monthly income per household (in ALL) 78 Table 4 Monthly income per household (in ALL) 78 Real estate prices and financial stability Table 1 Loan value by currency (in billion All) 85 Table 2 Real estate lending by portfolio quality 88 Annex Table 1 Fixed interest rates by currency 92 Table 2 Floating interest rates by currency 93 Table 3 Term structure by currency (in years) 93 Table 4 Covering ratio 94 Table 5 Pace of real estate prices 97 4 Bank of Albania Bank of Albania 5 volume 10 volume 10 number 3 number 3 September 2007 Economic Bulletin Economic Bulletin September 2007 C H A R T S Quarterly review of the Albanian economy over the third quarter of 2007 Chart 1 Price performace of one crude oil barrel, WTI, (in USD) 11 Chart 2 Total inflation and core inflation (annual changes in percentage) 12 Chart 3 Alternative measures of net inflation: inflation excluding foodstuffs (left-hand side) and inflation excluding foodstuffs and administered prices and excluding foodstuffs and services (right-hand side) 12 Chart 4 Contribution of items to annual inflation (in percentage points) 13 Chart 5 Annual inflation of ‘Housing’ (left-hand side) and ‘Administered prices’ (right-hand side) 14 Chart 6 Annual inflation rate by tradable and non-tradable sectors 15 Chart 7 Annual change of domestic grains price (left-hand side), of grains price abroad and of the exchange rate (right-hand side) 17 Chart 8 Annual change of oil price in the country and abroad and the exchange rate 17 Chart 9 Performance of key interest rate 18 Chart 10 Interest rates in the money market 21 Chart 11 Government’s securities yield in the primary market 21 Chart 12 Weighted average interest rate for new credit 22 Chart 13 Core interest rates and 12-month deposits’ interest rates 22 Chart 14 Annual changes of the Lek in nominal effective terms (left-hand side) and the daily performance of ALL/EUR and ALL/USD (right-hand side) 23 Chart 15 Current account and balance of payments (in % to GDP) 24 Chart 16 Structure of imports and exports (in %) 25 Chart 17 Annual contribution of demand factors to M3 growth (in billions of ALL) 26 Chart 18 Annual performance of public sectors’ net borrowing and money supply 27 Chart 19 Annual growth rate of deposits denominated in foreign currency higher than M3 growth rate 28 Chart 20 Time structure of deposits denominated in ALL to time deposits 28 Chart 21 Performance of lending activity 29 Chart 22 Contribution of each group to the growth of credit in percentage to GDP 30 Chart 23 Contribution of the growth of sectors’s sales to the growth of total sales (in percentage) 31 Chart 24 Housing price index and construction price index 35 Chart 25 Main fiscal indicators (as a share to GDP) 35 Chart 26 Structure of budget spending (in percentage) 36 Chart 27 Performance of unemployment and employed indicators 37 Articles Nationwide remittance beneficiaries survey Chart 1 Households’ size 67 Chart 2 Average monthly income per household (in ALL) 68 Chart 3 Frequency of remittances (euro) 70 Chart 4 Remittances annual average flow per migrants and the years in migration 71 Chart 5 Distribution of remittances by relationship with the sender (as percentages over the total amount sent) 71 Chart 6 Remittance transfer channels 72 Chart 7 Distribution of remittances by countries of origin 73 Chart 8 Remittances savings rate 73 Annex Chart 1 Average monthly income of households in rural areas 79 Chart 2 Average monthly income of households in urban areas 79 Chart 3 Daily per capita income 79 Chart 4 Daily per capita income in urban areas 79 Chart 5 Daily per capita income in rural areas 79 Chart 6 Daily per capita income excluding remittances - rural areas 79 Chart 7 Daily per capita income excluding remittances - urban areas 79 Real estate prices and financial stability Chart 1 Banking system real estate’s balance to outstanding loans 84 Chart 2 Real estate lending by sectors 84 Chart 3 Real estate lending by currency 84 Chart 4 Non performing loans ratio 88 Chart 5 Real estate lending by portfolio quality 88 Annex Chart 1 Types of collateral (in %, for 2006) 91 4 Bank of Albania Bank of Albania 5 volume 10 volume 10 number 3 number 3 September 2007 Economic Bulletin Economic Bulletin September 2007 6 Bank of Albania Bank of Albania 7 volume 10 volume 10 number 3 number 3 September 2007 Economic Bulletin Economic Bulletin September 2007 QuarterlY REVIEW OF THE ALBANIAN ECONOMY OVER THE THIRD quarter OF 2007 GOVERNOR’S SPEECH The Albanian economy marked positive annual growth rates during the nine-month period of 2007, while consumer prices inflation was quite low for most of the period. Economic growth during the present year is expected to be around 6 per cent. Despite the upward trend, average annual inflation during January – September was 2.7 per cent, being quite close to the Bank of Albania target of 3 per cent. The growth of demand has been assessed to have been more rapid than the growth of supply. The consumption of companies and households continues to represent the most significant and dynamic part of aggregate demand.