October 16 (SeeNews) - Albania's economy is expected to grow by just 2.0%-2.5% this year, much slower than last year but faster than originally expected, the head of the country's central bank told the Dow Jones Newswire on Friday.
"Our forecast is for between 2% and 2.5% growth this year, down from 6% last year," Ardian Fullani told Dow Jones. "But our original forecast at the start of this year was for between zero and 1%."
Albania has largely escaped the direct effects of the world financial crisis but has been hit by a crisis of confidence that has weighed on growth, Dow Jones reported.
But the worst of the crisis has passed and confidence in Albanian banks has been restored, Fullani said, adding that capital flows are returning to the country.
"Now we are seeing that deposits are coming back from abroad and confidence has been restored," he said. "So that means that bank lending should increase."
"The key issue is for us to see an increase in foreign direct investment and in bank lending," he added. "And so far we are seeing some good signs."
The government in Tirana has said Albania's economy grew by 8.0% last year and 6.0% in 2007. The European Bank for Reconstruction and Development and the International Monetary Fund estimate the country's economic growth at 6.8% for 2008.
Last month the government lowered its growth forecast for the current year to a real 5.8% from 6.3% projected earlier.