Given the balancing of above stated developments, the accelerated growth of exports has provided a positive contribution on the total demand and on the economic growth. Exports climbed by 45.1 percent in annual terms, during the first quarter of 2010, whereas imports recorded an annual drop by about 2.3 percent. Accelerated upsurge of exports and the fall of imports at more moderate paces led to the contraction by about 17.1 percent of trade deficit, pursuing the trend observed even during the second half of 2009. The ratio of imports covering from exports pointed to 35.4 percent, about 11.6 percentage points higher than in the previous year. The above stated developments in the foreign economy sector have established a more sustained balance of the supply and demand for foreign currency, thereby providing a higher stability of the domestic currency value during the last months of year. It is needed this momentum adopts a stability over the medium term, through the accelerated implementation of facilitating supporting policies. Economic background and monetary developments have established an environment with moderate inflationary pressures. Annual Inflation in April pointed to 3.5 percent, thereby recording a drop of 0.4 percentage points relative to March 2010. The return of inflation within the target of the Bank of Albania was an expected development, forecasted previously. Consumer price inflation in Albania, during the last months, owes to a greater extend, to the increase of administered prices, the uprising trend of prices in the world conjuncture and by the subsequent effects of exchange rate depreciation on inflation.
Business’ demand for loans persists to be the sole lending increase source, whereas loan to households continues to shrink in annual terms, for the fifth consecutive month. During this period there are transmitted also the first signals on an easing of lending standards from banks, but this step is applied only on large-sized business. Fiscal stimuli developed at more controlled paces in the first 4-month period of year, providing a lower contribution on the economic activity during this period. Fiscal policy has  BIS Review 77/2010  1  maintained an encouraging character, but at a lower rate relative to the same period of previous year. Budget deficit amounted to ALL 5.3 billion, contracted by 47 percent in annual terms. The low economic activity is reflected on the low growth by about 3 percent of budged revenues during the first 4-month period of year. On the other side, budget expense recorded a reduction by about 2 percent from the rate recorded in the previous year. Bank of Albania continues to draw the attention that, notwithstanding the short-term positive effects the fiscal stimuli may generate; the long-term stability of public sector should remain the main leader of fiscal policy. The lesson from the current problematic situation involving many European Union countries, is the indispensability for consolidation of public finances and for that purpose the implementation of important correcting measures at quickest time, is a target of strategic importance.