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.
Ardian Fullani: Economy and key interest rate in Albania Speech by Mr Ardian Fullani, Governor of the Bank of Albania, at the press conference on monetary policy decision-making of the Supervisory Council of the Bank of Albania, Tirana, 26 May 2010. *  *  *  The Supervisory Council of the Bank of Albania on its meeting of 26 May, 2010 reviewed and approved the Monetary Policy Monthly Report. Taking into account all the latest economic and financial development at home and their projections on the future, at the conclusion of discussions, the Supervisory Council of the Bank of Albania decided to leave the key interest rate unchanged, at 5.25 percent. *** The improvement of the world economic activity, as shown by the sharp growth of the emerging countries’ economies and by the moderate rise of the major part of developed countries’ economies, has characterised the early months of 2010. Economic recovery is accompanied by the increase of trade activity, in the meantime central banks and fiscal authorities have pursued to support the aggregate demand through easing policies. Notwithstanding the climbing trend of commodities prices, the inflationary pressures continue to be still low owing to the negative gap of production. However, the events occurring in the last weeks have revealed that both euro area and world economies are characterised by high uncertainties as regard the future. The economic and political discussions are particularly focused on the fiscal situation.