After the rapid growth of savings in 2020, which coincides with the pandemic period, Albanians are saving less this year, but the trend remains expanding.
Bank of Albania data show that at the end of February, the stock of deposits in the country reached ALL 1.11 billion, with a slight increase of 0.16% compared to the previous month, almost at the same rate as in the first month of the year. Compared to January-February 2020, when the pandemic had not started, deposits increased 4 times less.
The increase in February was entirely due to savings in euros, while those in lek marked a downward trend. The trend is opposite from the previous year, when growth was driven by lek deposits. In January and February, savings in local currency fell slightly, while those in euros were expanding.
On an annual basis (February 2021 / February 2020), savings increased by 7%, or ALL 73 billion (EUR 600 million more), as a result of their high increase in pandemic months, driven by domestic currency deposits .
This trend of increasing savings in the pandemic period was present in all European countries. Lack of travel and uncertainty about the future pushed family members to put more money aside.
Business deposits also marked a significant increase, undergoing a rise by 20% in lek and 13% in euro on an annual basis in February. Curbing investment by crisis-related uncertainty and rising government payments in December are the reasons for this trend.
In both lek and foreign currency, the increase came from high liquidity (non-term) deposits, while low interest rates on savings are very low, not encouraging the placement of savings in time deposits.
Individuals' savings in lek without a term increased by 25% on an annual basis in February (+31 billion lek), while those with a term fell by 3.5%. Annual interest rates for the local currency are around 1%.
In euro, household savings in current accounts for the same period increased by 14.8% (+19.7 billion ALL), while in the term they fell by 5.7%, while interest rates for the euro were zero.
At the end of February, euro deposits accounted for 53.7% of the total, down 1 percentage point compared to the same period a year earlier, due to the faster growth of lek savings during the pandemic period.