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The strengthening of the Lek and the blocking of the Cadastre, lending to the economy fell in July

Politiko 2023-08-30 16:50:27

The strengthening of the Lek and the blocking of the Cadastre, lending to the

Lending to the economy slowed down in July. According to the Bank of Albania, the new loan for July was worth 22.4 billion ALL, down 8.8% compared to the same month last year.

For the first 7 months of the year, credit continues to remain at the highest level in the last eight years, but with slower growth rates. For the January-July period, a total of 162 billion new loans were granted, with a modest increase of 0.9% more compared to the same period a year ago.

Since the loan figures are not adjusted for the effect of the exchange rate, however, the growth of lending is estimated to have been significantly influenced by the strengthening of the local currency against foreign currencies. Also, another factor that may have inhibited crediting for the month of July is the complete closure of the Cadastre's physical counters.

According to the Albanian Association of Banks, the non-execution of blocking actions on properties that are left as collateral has become a factor with significant influence in curbing credit in the last two months. According to the internal analyzes of the banks, the figures of disbursements have shown a significant decrease and it is estimated that the main factor is precisely the blocking of the actions of the Cadastre.

The credit for July fell, both in the segment of businesses and in that of individuals.

Credit for businesses in July was worth 15.8 billion ALL, 11% less compared to July last year. Even the 7-month progressive balance is decreasing. Private companies received a total of ALL 103.2 billion loans, with a decrease of 1.5% compared to the same period last year.

Even new credit for individuals in July marked a slowdown for the second month in a row. The new loan was worth 6.55 billion ALL, 2.2% less compared to July last year. However, for the 7-month period, the new loan remains in slight growth, with 1.7% more compared to a year ago.

At the end of July, the total loan portfolio for the economy, expressed as a surplus, suffered a significant contraction. It decreased to the value of 704.5 billion ALL, about 9 billion ALL less compared to June.

The fall in July caused annual credit growth to almost stagnate for many years, roughly at the same values ​​as the same period last year. In addition to the slowdown in new credit, to a large extent this performance has also been influenced by the strengthening of the Lek in the exchange rate, which has reduced the value of the foreign currency portfolio.

The performance appears more negative in the business segment, with 3.7% less compared to the same period a year ago. Meanwhile, the segment of individuals presents a more positive performance, growing annually by 7.5%. However, even among individuals, growth rates have slowed down significantly compared to last year./ monitor

 

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