The Governor Gent Sejko of Bank of Albania (BoA), during the presentation of the World Bank's Executive Director for Albania, Patrizio Pagano, emphasized that the Albanian economy has reduced its productivity.
As a finding of the study titled "Productivity Slowdown and the Hypothesis of Centuries-old stagnation," Sejko argued that the productivity and its role in economic growth is a key topic of discussion among decision makers in the economy."Our studies have found that the extent of productivity expansion in the Albanian economy - largely determined as the ability of the economy to use labor and physical capital to generate output - has halved in this period, from 2% to 1%," said Governor .
He further added that the shifting financial, human and managerial resources across the economy sectors requires time and is accompanied by a temporary productivity slowdown.
Sejko suggests that, according to the above study, should be moved from building to exports. "However, the rebalancing of growth sources, from construction and trade to industry and export services, is a process that has already begun. This gradual shift is also reflected in the symmetric rebalancing of the bank loan portfolio," said the Governor of BoA.
The governor adds further that the productivity and its role in economic growth has been and is a topic that has had great attention at the Bank of Albania.
"Our studies suggest that, beyond the cyclical fall of aggregate demand, the economic downturn in Albania in the post-crisis period has also had a strong structural element. In other words, halving the growth rate in the pre- and post-crisis period reflects both the slowdown in demand for goods and services and the slower capacity of the economy to deliver these products. In particular, our studies have found that the extent of productivity growth in the Albanian economy - largely determined as the ability of the economy to use labor and physical capital to generate output - has halved in this period, from 2% to 1%. For this reason, productivity growth has been and should remain a guideline for the country's structural reform agenda, " said Mr. Sejko.