Rising Prices Drive Surge in Albanian Business Deposits




In 2023, business bank deposits in Albania experienced significant growth. Data from the Bank of Albania reveals that by the end of the year, business deposits in banks had reached a record 360 billion ALL, marking a 15.5% increase compared to the previous year.

This surge in business deposits has been a prominent trend in recent years, accelerating particularly after the pandemic. Compared to 2020, business bank deposits have soared by nearly 85%.

The growth is even more substantial when considering the effect of the exchange rate on foreign currency deposits. Since early 2020, the Euro-Lek exchange rate has declined by 15%.

In the post-pandemic period, business bank deposits have been growing at much higher rates compared to individual deposits. The most significant disparity occurred in 2021, when business deposits rose by 27%, while individual deposits grew by just 8.1%.

This gap narrowed in 2022, with business deposits increasing by 8.9% and individual deposits by 5.2%. However, in 2023, the difference widened again as individual deposits grew by only 3.2%, whereas business deposits surged by 15.5%.

Consequently, the proportion of business deposits relative to total deposits has increased markedly. By the end of 2023, business deposits constituted 22.4% of total deposits, up from 16.2% at the beginning of 2020.

The robust growth of business deposits in recent years is attributed to several factors. Primarily, it reflects the substantial gains Albanian enterprises have achieved from the economic recovery post-pandemic and the significant price increases following 2022.