Bank of Albania (BoA) said Saturday that the expansionary fiscal policy will support the acceleration of economic growth of Albania during the 2014, according to ATSH news Agency.

Reforms to improve the business climate and the payment of arrears to public works carried out by the private sector will provide an important contribution for the economic rehabilitation.

The need to accelerate economic growth in Albania, is further underlined after slowing sharply in 2013. After shrinking by 2.5 per cent in Q3, 2013, the country's economy recorded a real growth of 1.1 per cent in the last quarter of year, compared with the same period a year ago. The average growth rate for 2013 was estimated 0.44 per cet.

Despite the improvement in last quarter in some sectors of the economy such as, industry, agriculture and construction, the aggregate demand is weaker than expected, as private consumption and investment remain low and the unemployment rate has increased. During the period under analysis, external demand has given negative contribution to the economic growth, in terms of expanding current account deficit.

According to BoA, during the period under analysis, fiscal policy of Albania has been expansionary in its entirety, but volatility in fiscal performance has been higher, reflecting some changes in policy decision dictated by political developments. The budget deficit is largely financed with internal resources and decreasing cost.

Monetary policy of the Bank of Albania has continued to remain stimulative. This is reflected in the decline of interest rates in financial markets in the country, supporting better countercyclical actions for the banking sector, undertaken during 2013. Endi