How productive was the Albanian economy in 2024? - BoA Annual Report/ Employment and wages increased. More income for families
In the past year, economic growth remained at high levels, around 4%, accompanied by an increase in employment and wages. The Bank of Albania has submitted its report for 2024 to the Parliament, assessing it as positive for the economy.
The increase in employment and wages has increased incomes for Albanian households, especially in an environment of low inflation. In 2024, inflation fell to an average level of 2.2%, marking a significant decline from the high levels of 4.8% of the previous year. This decline had a positive impact on reducing the cost of living and improving the purchasing power of Albanian households' incomes and savings.
On the other hand, the decline in external debt to 40.8% of Gross Domestic Product (GDP), or the increase in Albania's foreign exchange reserves to 6.3 billion euros, significantly improved the country's solvency. During 2024, the budget deficit was reduced to 0.7% of GDP and public debt to 53.8% of GDP.
In terms of payment infrastructure, the number of electronic payments made through banks increased by 24.4% compared to the previous year. Meanwhile, the 'payments per capita' indicator, targeted at 10 payments per capita, reached 23 payments per capita at the end of the year. This progress reflects the growing trends of digitalization of financial services, facilitating electronic transactions and accelerating the financial inclusion of individuals and businesses.
Last year, the stock of gross foreign exchange reserves increased to 6.2 billion euros from 5.8 billion previously.
Meanwhile, the quality of the loan portfolio also appears to have increased. The financial result of the system amounted to 37.4 billion lekë, an increase of 17% compared to 2023. The expansion of banking sector assets mainly reflected the growth of loans and investments in securities, while the increase in liabilities fully reflected the expansion of deposits by about 5% in annual terms.
Credit costs fell and credit grew to 15.7% from 9.7% a year earlier, also supported by increased demand and banks' positive approach to lending. The credit growth has financed the consumption and investment needs of households and businesses.
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