Haderi S., H. Papapanagos, P. Sanfey and M. Talka. “Inflation and Stabilization in Albania,” Discussion Paper No.96/13, University of Kent, 1996.
Jarvis, Chris, “The Rise and Fall of the Pyramid Schemes in Albania,” (IMF Working Paper 99/98, IMF, Washington, D.C., July 1999).
Korovilas, James P., “The Albanian Economy in Transition: The Role of Remittances and Pyramid Investment Schemes,” in Post-Communist Economies, Vol. 11, No.3, 1999.
The quality of available data makes it difficult to be certain of macroeconomic developments in Albania. Nonetheless, Albania’s strong growth performance in the early transition years is also suggested by a number of proxy indicators in particular in the agricultural area and the services sector. For a more detailed description of the period before 1997, see e.g., Albania: Recent Economic Developments. IMF, April 1997.
Pyramid schemes were companies that, by claiming to be engaged in profitable investments, attracted large and increasing volumes of funds from private depositors with promises of dramatically high returns. In reality, however, depositors’ funds were largely not used for solid investments, but served either to pay interest on existing deposits or were transferred by the schemes’ owners to bank accounts abroad. The pyramid schemes collapsed in early 1997, causing an estimated loss of savings of about $1 billion. The pyramid scheme crisis has been described in an IMF Working Paper prepared by Chris Jarvis (1999).
Mandatory minimum deposit rates were first introduced in 1992.
As inflationary pressures had subsided already in 1999, a loosening of monetary policy might have been appropriate even in the previous year.
The overall deficit includes expenditure financed by grants and concessional lending.
Defined as revenue minus expenditure (excluding foreign-financed capital expenditure and interest payments).
In interpreting these figures, the simultaneous increase of the threshold for small businesses and the lowering of the VAT threshold that was implemented at the beginning of 2001 needs to be taken into account.
The ban on lending by the NCB was lifted after its privatization in October 2000, but the NCB has only recently and very cautiously resumed its lending.