Fitch Solutions: Albania has high political and economic risk

Fitch Solutions: Albania has high political and economic risk

TIRANA, July 3- Fitch Solutions has released the latest country risk index report in Southeast Europe. Fitch’s index lists countries on a scale from 0 to 100, assessing short and long-term political stability, short-term economic outlook, long-term economic potential, and

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Tax for cars to be reviewed

Tax for cars to be reviewed

TIRANA, July 2- The government expects to change the taxation policy on vehicles, whereby the more powerful the car one owns, the more they will have to pay. Referring to an official document, it is foreseen that there will be

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Insurance companies compensate 18 million euros bills

Insurance companies compensate 18 million euros bills

TIRANA, July 2- Insurance companies have paid in total as damages compensations over 2.3 billion lek (18 million euros) in the first five months of this year. Official data on the insurance market published by the Financial Supervisory Authority (FSA),

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VAT threshold reduction doesn’t generate expected revenue

VAT threshold reduction doesn’t generate expected revenue

TIRANA, July 2- The reduction in the Value Added Tax (VAT) threshold for small businesses from 5 to 2 million lek (13-40.5 thousand euros) of turnover, has not served as an incentive policy for increasing VAT revenues over the past

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Consumption reduction continues

Consumption reduction continues

TIRANA, July 2- The political crisis has lagged consumption in the last six months. Official data shows that consumers are mainly focused on basic purchases, avoiding the consumption of durable goods. According to INSTAT data, the consumption of the population

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Albania-Kosovo trade dispute continues

Albania-Kosovo trade dispute continues

TIRANA, July 3- Chairman of the Kosovo Chamber of Commerce Nikolin Jaka, announced today that a working group has been established with coordinators the Kosovo Economic Chamber and Tirana Chamber of Commerce, which will collect and filter all issues between

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Economy in Brief

Economy in Brief

Albanian economic growth halves TIRANA, July 2- The economic growth during the first quarter of the year is recorded at 2.21 percent. Compared to the same period last year, the growth rate seems to have shrunk by almost half, as

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BoA warns halving of economic growth to continue

BoA warns halving of economic growth to continue

TIRANA, July 3- According to Albanian Institute of Statistics (INSTAT) data the economic growth was 2.2 percent in the first quarter of the year, almost halving from the 2018 average rate of 4.06 percent. Governor of the Bank of Albania

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Kosovo trade war exacerbates

Kosovo trade war exacerbates

TIRANA, June 26- The Kosovo Producers’ Club (KPC) has reacted to the decision taken by North Macedonia to stop the import of fish from Kosovo, a ban on the import regulations where the third country list is banned from importing

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Albania loses war with Serbia on a 10-year eurobond

Albania loses war with Serbia on a 10-year eurobond

TIRANA, June 27- Serbia lately managed to successfully emit a 10-year Eurobond worth 1 billion euros versus a 1.6 percent interest. According to the auction data, the low interest rate was dictated by the high demand of investors to buy

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                    [post_content] => TIRANA, July 3- Fitch Solutions has released the latest country risk index report in Southeast Europe. Fitch's index lists countries on a scale from 0 to 100, assessing short and long-term political stability, short-term economic outlook, long-term economic potential, and operational barriers to doing business (the lower the index, the higher the risk). Albania, along with Kosovo and Bosnia and Herzegovina, is included in the countries with the highest economic risk in the short term. The index for Albania is 45.2, weakening slightly in relation to the previous year's rating, while the lowest is Bosnia and Herzegovina with 35.8 and Kosovo with 40.4 percent. The most positive prospect in the short run is Macedonia, with an index of 52.9. In the long run, the index foresees for Albania a slight improvement of the economic prospect (the index increases to 50.3). Also in last year’s report the economic outlook was expected to improve at 49.6, but that didn’t happen. Regarding political risk, it remains lower than in Kosovo, Macedonia and Bosnia, with an index of 54.8. The political situation is expected to have the largest long-term improvement, as the index is projected to increase to 71.3, moving to Montenegro as well. Albania remains one of the countries with the highest operational barriers to doing business, with an index of 50.8 points, ranking slightly better only in comparison with Bosnia (46.8), which is a problematic state because of the split in two entities that creates great bureaucratic hurdles. Even Kosovo, a relatively new country, ranks better than Albania, having fewer operational barriers to doing business with. In the country's risk indicator, Albania is the third most negative, after Bosnia and Herzegovina and Kosovo. Fitch Solutions is an industry-leading provider of credit, debt market, and macro intelligence solutions, and the primary distributor of Fitch Ratings content. It is part of Fitch Group, a global leader in financial information services with operations in more than 30 countries. 
                    [post_title] => Fitch Solutions: Albania has high political and economic risk
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                    [post_content] => TIRANA, July 2- The government expects to change the taxation policy on vehicles, whereby the more powerful the car one owns, the more they will have to pay. Referring to an official document, it is foreseen that there will be a tax relief on hybrid or electric vehicles as well as for those that are in the Euro 4 or 5 category. This is seen as a way to promote the purchase of new vehicles, as well as those that emit as little pollution into the environment. Specifically in the document it is said that a reviewing to the current taxing system for vehicles will be done, like “application of the tax for all vehicles independently of age, but proportionally to the level of technology and the level of discharges of the vehicle itself; increase taxes in proportion to the cylinders/engine size; gradually tax exempt the low polluting vehicles such as Euro 4 and 5 or hybrid/electric vehicles. Of course, this is suggested as a measure that will take place in the medium term and requires the engagement of at least the Ministry of Environment and Tourism, Ministry of Infrastructure and Energy, and the Ministry of Finance and Economy, to come to a unified policy. In order to promote vehicles that emit as few polluting gases into the environment, cooperation with local units has been considered as essential, where municipalities will be required to engage in the installation of electric charging stations for electric vehicles. Similarly, fleet renewal will be required for companies that have one and provide services for urban transport vehicles, city cleaning and some other categories. To help reduce air pollution in the document, authorities are required to work to ease the distribution of low-impact filling stations (LPG and methane). Likewise, the provision of low sulfur content fuel and high quality (MS-level) fuel should be used in all means of transport. This will go hand in hand with increasing control over the testing of vehicle, buses and fleet emissions tests to limit and reduce particulate emissions and other air pollutants. According to Numbeo, the air pollution level in Tirana is 77.24 (high). 

 

(Note: this article does not appear in print)
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                    [post_content] => TIRANA, July 2- Insurance companies have paid in total as damages compensations over 2.3 billion lek (18 million euros) in the first five months of this year. Official data on the insurance market published by the Financial Supervisory Authority (FSA), showed that insurance companies paid 3.73 percent more than the previous year for this spending category. The FSA estimated that most of the gross paid damages belong to vehicle insurance with about 1.32 billion lek (10.5 million euros), or 56.33 percent of the total gross damages paid. Regarding the overall performance of the insurance market, this institution reported that income from gross written insurance premiums for January to May amounted to 6.75 billion lek (55 million euros), or 7.61 percent more than in the same period last year. For January and May 2019, the number of consigned insurance contracts is 482,741, with a 5.22 percent increase compared to 2018. The FSA explained that the market continued to be oriented to non-life insurance, which brought 92.19 percent of the total premium volume, leaving Life insurance with 7.23 percent and reinsurance activity by 0.57 percent. From the point of view of market sharing by type of insurance, compulsory and voluntary, gross voluntary insurance premiums occupy 40.25 percent and gross written premiums of compulsory insurance account for 59.75 percent of the total market. Just as it happens traditionally, the main dominance in this market is that of compulsory vehicle insurance. Premiums from this insurance amounted to 4 billion lek (32.5 million euros), or over 6 percent more than a year earlier. The FSA also added that the domestic MTPL product (motor third party liability insurance) in the period January to May had a 5.36 percent increase in the volume of gross written premiums. The Green Card Product in January-May increased by 12.25 percent of the volume of gross written premiums. The Border Insurance Product had a 12.07 percent decrease in gross written premiums in the period January to May.
                    [post_title] => Insurance companies compensate 18 million euros bills
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                    [post_content] => TIRANA, July 2- The reduction in the Value Added Tax (VAT) threshold for small businesses from 5 to 2 million lek (13-40.5 thousand euros) of turnover, has not served as an incentive policy for increasing VAT revenues over the past year. In a special analysis for this purpose, the Ministry of Finance had projected that the revenue effect from this policy was to be 1 billion lek (8 million euros) for 2018, out of which it collected only 0.8 billion lek (6.5 million euros). The total revenues collected from VAT within the country were 36.3 billion lek (297 million euros) during 2018, with an increase of 4 percent or 1.4 billion lek (11 million euros) compared to the previous year, and with realization to the plan at 97 percent or 1.2 billion lek (9.8 million euros) less than expected. The 12-month data of 2018 on the sectoral distribution of VAT within the country show that “Services,” “Production,” “Trade,” and “Building” have the main share in VAT revenues. The largest share in the payment of VAT last year was kept by the services sector with 32 percent of the total paid tax, followed by the manufacturing sector by 26 percent, the trade sector by 22 percent, construction by 18 percent, and the sector of transport by 2 percent. Reduction of VAT threshold for small businesses from 5 to 2 million lek began its implementation on April 1 last year. The International Monetary Fund (IMF) pointed out in its latest monitoring report that the General Directorate of Taxation (GDT) faced a major challenge in 2018 in managing a great expansion of the VAT register after reducing the census threshold. This reduction introduced about 13 thousand small businesses in the VAT system for the first time in April 2018 which increased the [VAT] register by a third. However, the IMF has stressed that the management of this group of taxpayers continuously imposes an increased burden on the GDT with a small return on revenue efficiency. It also brings additional costs to smaller businesses and is unlikely to have any material impact on reducing the tax gap.
                    [post_title] => VAT threshold reduction doesn’t generate expected revenue
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                    [post_content] => TIRANA, July 2- The political crisis has lagged consumption in the last six months. Official data shows that consumers are mainly focused on basic purchases, avoiding the consumption of durable goods. According to INSTAT data, the consumption of the population increased in the first quarter of 2019 with only 2.25 percent, marking a declining trend for the second consecutive quarter, while the indicator recorded the lowest growth rate since the second quarter of 2017. Final household consumption calculates all goods and services directly used to meet the individual requirements of resident households. INSTAT reported that final consumption of the population declined by 0.76 percent compared to the fourth quarter of 2018. In a more detailed analysis made by the Bank of Albania, it is estimated that the slowdown in consumption growth rates in total relates to impacts from the consumption of the population. The Bank estimates that from indirect data, the slowdown in consumer spending growth was recorded in the fourth quarter of 2018, mainly in the category of durable consumer goods and a similar situation is expected in the first quarter of 2019. The BoA announced a recovery in the consumption of the population in the first quarter driven by the improvement of consumer confidence, but the real performance has actually decreased. The time course of population consumption reflects the impact of political crisis. The political crisis weakens the consumption of valuable goods as economic agents and households tend not to make strategic spending in turbulent situations. Consumption is the basis of growth in our economy, but its low rates depict a damaged flow of the economy and consequently adverse effects to economic growth. Since the crisis of 2018, consumption has been weak, mainly due to the return of high emigration flows and the lack of fiscal stimulus in the expenditure side, raising salaries and pensions for years only at inflation rates.

 
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                    [post_date] => 2019-07-05 12:27:33
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                    [post_content] => TIRANA, July 3- Chairman of the Kosovo Chamber of Commerce Nikolin Jaka, announced today that a working group has been established with coordinators the Kosovo Economic Chamber and Tirana Chamber of Commerce, which will collect and filter all issues between Albania and Kosovo by July 15. This working group was set up after the May 21 “Opportunities and Aid for Trade Relations between Albania and Kosovo” Conference in Tirana, which highlighted the great obstacles that the two countries are experiencing. In a survey with Kosovo's entrepreneurships, Albania ranked second in the barriers to doing business with after Serbia. On the other hand, the Albanian entreprises have expressed its own reservations about the obstacles of doing business with a focus on export.

“The policy of our two countries needs to be oriented towards the economy,” Jaka said. “Our governments should sit down and solve the problems our enterprises are facing and that is the forum's duty and I am convinced that by July 30 we will come up with an action plan if our governments do not take into account the requirements of the two countries.”

The Tirana Chamber of Commerce appealed publicly to all Albanian enterprises that export to Kosovo that by July 15 to advertise in writing the issues they encountered during the exercise of their activity in Kosovo. Jaka said that the number of Albanian ventures that export to Kosovo does not exceed 800 commercial entities, referring to data of the first six months of 2019. He added that this figure is exceptionally low compared to the potentials the enterprises have.

Earlier, Kosovo authorities had warned that on July 1 they would set trade barriers against Albania, similar to those Albania has against Kosovo. There was no reaction from the Albanian government towards these claims however, as it was busy with local elections. Now the new deadline seems to be July 30, and unless measures won’t been taken by then, it is learned that businesses are set to react by blocking both sides of the border.

The Kosovo Manufacturers Club has assessed the main non-tariff barriers, whereby in each export the Albanian authorities require the original or notarized copy of the Quality Certificate for products subject to phytosanitary and veterinary control. Customs clearance procedures in Albania, payment of scanner, notarization of analysis, toll payments on the Nation’s Road, failure to take into account the invoice price by the Albanian Customs, implementation of the high excise rate for the beer sector, are some of the obstacles to which increase the cost of production but also lower the level of competitiveness of Kosovo products in the Albanian market.

Consequently, Kosovo businesses have requested the removal of payment for scanner in the Republic of Albania for all Kosovo-Albania import-export trades; recognition of certification and sanitary gain analysis of all products subject to these tests and certificates; acceleration of customs procedures in dealing with trade and economic circulation between the two countries; to completely abolish the 22.5 euros toll prices for both countries’ trucks, as the same poses an obstacle to economic development and cooperation between the two countries. Removal of all barriers including beer excise. For Albanian businesses, the main obstacles are the truck parking fees of 40 euros per day and the lack of phytosanitary certificates acknowledging.
                    [post_title] => Albania-Kosovo trade dispute continues
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                    [post_content] => Albanian economic growth halves

TIRANA, July 2- The economic growth during the first quarter of the year is recorded at 2.21 percent. Compared to the same period last year, the growth rate seems to have shrunk by almost half, as the growth performance ni 2018 was recorded at 4 percent. The economic growth last year was driven mainly by electricity generation as a result of favorable precipitation rainfall, which was accounted for as a surplus value and influenced about half of the growth.

However, the energy effect for the first quarter of 2019 has been completed, and thus the contribution of energy and industry to the country’s GDP was negative by -0.81 percent. A reduction was also seen in art, entertainment and recreation, and other service activities by -0.54 percentage points; and the immediate shutdown of gambling also affected by -0.5 percentage points. The sectors that have boosted growth in this period are trade, transport, accommodation and food business with 0.68 percentage points; real estate activities by 0.51 percentage points; construction by 0.43 percentage points; public administration, education and health by 0.36 percentage points; professional activities and services with 0.33 percentage points; agriculture, forestry and fishery activity by 0.26 percentage points; information and communications by 0.24 percentage points; financial and insurance activities by 0.2 percentage points; and net tax on products contributed positively to 0.48 percentage points.

 

Albania imports 40 percent of energy consumption

During January-April the total energy consumption in Albania was 2.7 million MWh. Domestic production was estimated to 1.6 MWh, while the rest was bought in the open market. For the first time it was also reported a production from photovoltaics at the amount of  6039 MWh. this renewable energy is expected to increase even more once the solar panel park in Akerni is finished. Likewise, a difference in production is expected to be done by the activation of self-productive plants after the solution of the cutoff with the guidance penalizing this category. 

 

Municipality arrears expand

Municipalities have further expanded the stock of overdue liabilities during the first quarter of 2019, bringing them to 7.2 billion leks (58 million euros). According to the domestic finance report for the first quarter, the stock of liabilities increased by 390 million lek (3.1 million euros) or by about 5.9 percent. 48.2 percent of the stock of overdue liabilities is represented by investments, 20.4 percent from goods and services, about 17.4 percent from court decisions and 11.8 percent from other liabilities. Eight out of 61 municipalities hold about 67.7 percent of the total stock arrears, and about 35.9 percent is held by the Municipality of Tirana.

 

Bank deposits drop in May

Bank deposits fell for the third consecutive month in May, reflecting mainly the contraction in foreign currency savings. The deposit stock owned by individuals, businesses, state institutions, non-profit organizations, etc., was 994 billion lek (8.1 billion euros) at the end of May. Since January the deposits have shrunk by over 9 billion lek (73 million euros). Compared to April the stock has decreased by 4.5 billion lek (36 million euros), while compared to May 2018 the deposits increased by 2.6 percent. The weight of foreign currency deposits in May was 53.7 percent of the total, from 52.6 percent in the same period of the previous year. Though the Bank of Albania has been campaigning against the high level of Euroization of the economy, foreign exchange savings, mainly in euro, remain preferred, due to the high foreign currency supply in the country and the fact that the low interest rate differential between the lek and the currency does not encourage the depositor to convert the savings to lek.

 

More business don’t pay state taxes

During the first five months of 2019, 5107 new businesses were added to the list of state tax debtors as published by the General Directorate of Taxes. This number amounts to 67 percent of the total businesses added to this list during 2018 (7588). This clearly points to a stronger growth in the number of ventures that fail to meet their obligations to the state. What was noted was that seven large enterprises (from 87 in total) were added to this list. In total, the business stock that was assigned a security and mortgage lien for unpaid liabilities has gone 26,400.

 

Insurers’ written premiums increase

The gross written premiums of Albanian insurers increased 7.6 percent year-on-year in the first five months of 2019, reaching 6.8 billion lek (55 million euros), official figures show. Gross written premiums from non-life insurance grew 6.7 percent to 6.2 billion lek (50 million euros), while the life insurance segment earned premiums of 488.5 million lek (3.9 million euros), up 12.9 percent, according to figures published by the Albanian Financial Supervisory Authority. Total gross claims paid increased to 2.34 billion lek (19 million euros) as at the end of May, from 2.26 billion lek (18.4 million euros) a year earlier. The statistics comprise data from eight insurance companies operating in Albania.

 

Inner migration halves

The domestic movement of citizens in 2018 has halved compared to the previous year, with a total of 26,437 citizens migrating, according to Albanian Institute of Statistics (INSTAT). The number of women who moved last year was 17,378, twice as high as that of men. During 2018 the number of domestic male migrants has declined considerably by 57.3 percent, while that of domestic female migrants was reduced by about 40.4 percent. During 2014-2018, the number of domestic female migrants was higher than the number of male ones, marking 65.7 percent in 2018. The highest number of displaced persons was in 2016 with a number of 57,920 displacements. Even in 2017, the number of internal movements exceeded 50 thousand. The total number of domestic migrants for the past five years is 204 thousand.

 

Albania with high middle age employees

Eurostat evaluated Albania with over 55 percent employment rate of the age group 55-64 years old. The rates for this age group in Serbia is 45 percent, in Montenegro 43, in Macedonia 40, in Turkey 34, in Kosovo 31, and in Bosnia 30 percent. The high percentage of employment to this age group in Albania is related to the high level of emigration of younger ages. This increasingly growing gap and a recent study point that this year the workforce will fall, facing the country's economy with an unknown phenomenon so far. According to the latest INSTAT projections, the working age population will decline at a slightly faster pace than the general population, with more than 18 percent in almost all districts, except those that increase the population through migration, such as Tirana, Durres and Vlora.

 

(Note: "Municipality arrears expand" does not appear in print)
                    [post_title] => Economy in Brief 
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                    [ID] => 142485
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                    [post_date] => 2019-07-05 12:03:01
                    [post_date_gmt] => 2019-07-05 10:03:01
                    [post_content] => TIRANA, July 3- According to Albanian Institute of Statistics (INSTAT) data the economic growth was 2.2 percent in the first quarter of the year, almost halving from the 2018 average rate of 4.06 percent. Governor of the Bank of Albania (BoA) Gent Sejko, announced today in a media conference after a Supervisory Council meeting that the economic growth will be similar in the second quarter of 2019.

He said the slowdown of the growth rate came mainly as a result of contraction of electricity generation and export. The indirect data available suggests that the Albanian economy has a similar performance so far. In terms of aggregate demand, economic growth continues to be supported by consumption and investment, while the foreign trade deficit is expanding and fiscal policy continues to maintain a consolidating one. The economic growth of 2019 is expected to be slower than that of the previous year, reflecting the shock of the supply of electricity generation.

“The new information taken into consideration has been at the bottom of our expectations,” Sejko said. 

He said inflation continues to remain under target, mainly as a result of the deterrent effect that continues to provide a rapid strengthening of the exchange rate over the past year. On the other hand the monetary conditions are stimulating and the lending activity has shown signs of recovery. The BoA’s forecasts for the future have not undergone significant changes, although the downside risks have increased. In these circumstances, the Supervisory Council judged that the current stimulus stance of monetary policy remains adequate to guarantee the return of inflation to the target level over a medium-term timeframe.

From a macroeconomic point of view, the below-target inflation level continues to reflect the continuing slow growth in wages and production costs in the economy, and also the low inflation in Albania’s trading partners, and the backward effect due to the exchange rate depreciation. Based on observed trends, the Supervisory Council considers that domestic and imported inflationary pressures will gradually return in line with the Bank’s inflation target over the next two years.Despite the slowdown in growth rates, employment and wages have increased in the first quarter. According to INSTAT data, the unemployment rate dropped to 12.1 percent, while the average wage recorded an annual growth of 4.9 percent. This performance creates grounds for a faster growth of domestic inflation to bring it to the 3 percent target. 

The easing monetary policy has been aligned with fiscal consolidation and has created a financial environment characterized by low interest rates, ample liquidity, and falling premiums. The monetary stimulus has reduced private sector financing costs, has supported the growth of lending, consumption and investment, and has created premises for a smooth exchange rate performance. The latter has followed a slight overestimating trend during the second quarter, in line with its seasonal behavior. However, foreign trade data and the smooth functioning of the foreign exchange market suggest that the duration and intensity of the exchange rate strength will remain limited. Consequently, its inhibitory effect on inflation will come towards a reduction.

Favorable lending conditions have been translated into stable credit growth for the private sector. Adjusted for off-balance-sheet loans and exchange rate, the private sector credit increased by 6.7 percent in April and May. The extension of the loan portfolio has been more balanced, both in terms of the currency structure and its destination, recording the expansion of the portfolio both in loans to individuals and businesses. Although moderate, credit growth for businesses is a positive signal for improving demand and supply for loans. The recovery of the non-performing loan-to-GDP ratio, as illustrated by its decline to 11.37 percent in May, provides encouraging signals for the further improvement of the credit environment and banking sector balances.

Judging by the current trends of development and their determining factors, the Bank of Albania estimates that the aggregate demand will increase over the medium term. Expanding the economic activity will enable full utilization of production capacities and is expected to generate an employment and faster wage growth, and production costs. Inflation is projected to return to the target in the first half of 2021.

Downhill risks remain predominant and are further strengthened. They relate to the external environment, the exchange rate performance and its impact on inflation, the ability that the loan offer will have to respond to the expected improvement in demand, and ultimately the political situation in the country. The lengthening of political disputes in the country will be reflected in the business climate and can affect economic activity. Given these considerations, the Supervisory Council estimates that the monetary policy will continue to be stimulating in the medium term. At this meeting it also decided to keep the key interest rate unchanged at 1.0 percent. 
                    [post_title] => BoA warns halving of economic growth to continue
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                    [post_date] => 2019-06-27 19:46:14
                    [post_date_gmt] => 2019-06-27 17:46:14
                    [post_content] => TIRANA, June 26- The Kosovo Producers' Club (KPC) has reacted to the decision taken by North Macedonia to stop the import of fish from Kosovo, a ban on the import regulations where the third country list is banned from importing live fish that is for growing or sale, and that are originating from Kosovo.

KPC reacted by saying that no part of the regulation shows the reasons for this ban. In the reaction it was also added that Macedonia is now being added to the list of CEFTA members who do not respect the free trade agreements with Kosovo after Serbia, Bosnia and Herzegovina and Albania.

“This decision directly damages local businesses that deal with fish farming, as North Macedonia has been one of the most important markets for the sale of live fish by Kosovo's producers. During 2018, Kosovo exported live fish in Northern Macedonia in the amount of 26 tonnes and worth 95 thousand euros. And in 2019 only in May the export value was 23 thousand euros, which is several times higher than the previous months,” the reaction wrote.

The Producers' Club has asked the Kosovo authorities to react and request the revision of this decision from Macedonia and to show the real reasons for the ban. “But even to demand that free trade agreements be implemented and such blockades that damage Kosovar producers will not be a practice in the future,” the reaction concluded.

The Kosovo Chamber of Commerce (KCC) expressed great concern over the decision taken by the Republic of North Macedonia to ban the sale of Kosovo Fish. According to them this concern was accepted by the member business “Trofta Istog.” The decision which entered into force since June 1, prohibits the import of live fish originating from Kosovo intended for the growth or filling of ponds. The Trofta Company was informed of this decision without prior warning. The KCC said that domestic fish breeding businesses have been damaged in particular, but Macedonian traders who can not be supplied with fish from Kosovo also appear concerned.

This decision leaves Kosovo’s exports still very low. Kosovo imports 90 percent of its goods, while it exports only 10 percent.  And a tax of about 700 euros has been set for every entry of fishermen in Macedonia.

The businesses have affirmed that they are available at all times to expect inspections on their working environment and to carry out the necessary tests in a third country. In this regard, KCC addressed a letter to the Minister of Trade and Industry to take urgent steps to abolish this decision by North Macedonia. The Prime Minister of Kosovo, the Minister of Economic Development, and Kosovo’s Agency for Food and Veterinary were also informed.

But if that wasn’t enough trouble for Kosovo, tensions with Serbia have started to exacerbate. Serbian President Aleksandar Vucic has stated that countermeasures on the 100 percent tax imposed by Kosovo on Serbian goods, will begin immediately after the Vidovdan holiday, which is held on June 28 in Gazimestan. He said that a conversation with representatives of Serbs in Kosovo will take place and will decide what measures to take. Vucic said he hopes no countermeasures are needed, but according to him Serbs are forced to do so if there is no progress. He also stated that the agreement on the crossings in Jarinje and Bernjak signed in 2011 should be respected as they were signed, although he said it was the worst deal ever.
                    [post_title] => Kosovo trade war exacerbates
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                    [post_date] => 2019-06-27 19:44:23
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                    [post_content] => TIRANA, June 27- Serbia lately managed to successfully emit a 10-year Eurobond worth 1 billion euros versus a 1.6 percent interest. According to the auction data, the low interest rate was dictated by the high demand of investors to buy Serbian debt, who offered 6 billion euros against the 1 billion that Serbia demanded. The Balkan country had a less favorable macroeconomic environment than Albania after the 2008 crisis, with bad debt and credit at the highest levels in the region. But while the reforms Serbia undertook relaxed their macro environment, the rest of the regional countries didn’t follow the same trajectory, especially Albania. In the autumn of last year, Albania issued a seven-year Eurobond worth 500 million euros against the interest rate of 3.55 percent.

In 2014, Serbia had the highest level of public debt in the region with 70.4 percent of GDP. Albania ranked second with 70.1 percent, as a result of the re-qualification of hidden bills worth about 500 million euros. But Serbia is now heading to the lowest regional levels for public debt, whereas Albania's debt risks to remain at the same levels if the government involves these debts in arrears and obligations to concession contracts. The International Monetary Fund (IMF) estimates that the Albanian government has over 20 million euros in arrears in its 2019 balance sheet, as concession contracts signed and payable in the next 10 years are as much as 18 percent of GDP.

According to official data from the European Commission, Serbia's debt has decreased by 16 percentage points from 2014 to 2018, reaching 53.8 percent of GDP, while Albania's debt has decreased by only by 3 percentage points over the past four years, to 67.1 percent. During this period, Serbia implemented a strong fiscal discipline by bringing the deficit balance downward and lowering its debt stock in November, as the country's economy grew at 3 percent. Economic growth and budget surplus were the main indicators of debt reduction, apart from the reforms undertaken to reduce domestic debt costs.

The transaction, which took place on June 19, represents the first issue of Serbian government securities in euros in the international capital market and the proceeds will be used to fund the 1.1 billion dollar bonds that had been issued earlier, according to data from the Serbian Ministry of Finance. In this way, Serbia has saved more than 3.8 billion dinars (32 million euros) in interest payments on the previously borrowed dollar bonds in 2011 and 2013, maturing in 2020 and 2021 respectively. “Successful fiscal consolidation and comprehensive reforms carried out in recent years, together with the favorable conditions in the international financial capital market, resulted in a low interest rate of 1.5 percent (coupon rate) and a yield of 1.62 percent, with a request that reached a record 6.4 billion euros,” saod Serbian Finance Minister Sinisa Mali in a statement to the media. 

About 300 investors from around the world showed interest in the Serbian Eurobond, Mali added. Serbia's budget was in surplus of 32.2 billion dinars (273 million euros) in 2018, and in the first four months of 2019, the country had a budget surplus of 5.5 billion dinars, about 46.5 million euros. According to official data in January 2019, the public debt of the Republic of Serbia fell by 2720 billion dinars (23 billion euros) compared to the end of December 2018, and its public debt was 50.6 percent at the end of January 2019.

In 2010, when Albania marked its first exit to the capital markets to receive a 300 million euros eurobond with a fixed-rate interest rate of 7.5 percent and a five-year maturity. Although a seemingly high interest today, it should be taken into account that this was Albania’s first test in this market with an overall unfavorable situation as the economic crisis was still apparent and the capital markets were directly affected.

Albania's second exit was on Nov. 5, 2015, for another 300 million euros. The fixed coupon secured at this outlet was 5.75 percent with five years maturity. The most recent exit of 2018 holds the lowest historic interest earned by Albania in capital markets. But we have only improved in relation to ourselves, but the neighbors appear better. Over the past year, Macedonia's Eurobond bond was traded at around 3 percent, for example, and now, Serbia issued a longer-term maturity eurobond in 10 years, with only 1.6 percent interest.
                    [post_title] => Albania loses war with Serbia on a 10-year eurobond
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            [ID] => 142506
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            [post_date] => 2019-07-05 12:39:19
            [post_date_gmt] => 2019-07-05 10:39:19
            [post_content] => TIRANA, July 3- Fitch Solutions has released the latest country risk index report in Southeast Europe. Fitch's index lists countries on a scale from 0 to 100, assessing short and long-term political stability, short-term economic outlook, long-term economic potential, and operational barriers to doing business (the lower the index, the higher the risk). Albania, along with Kosovo and Bosnia and Herzegovina, is included in the countries with the highest economic risk in the short term. The index for Albania is 45.2, weakening slightly in relation to the previous year's rating, while the lowest is Bosnia and Herzegovina with 35.8 and Kosovo with 40.4 percent. The most positive prospect in the short run is Macedonia, with an index of 52.9. In the long run, the index foresees for Albania a slight improvement of the economic prospect (the index increases to 50.3). Also in last year’s report the economic outlook was expected to improve at 49.6, but that didn’t happen. Regarding political risk, it remains lower than in Kosovo, Macedonia and Bosnia, with an index of 54.8. The political situation is expected to have the largest long-term improvement, as the index is projected to increase to 71.3, moving to Montenegro as well. Albania remains one of the countries with the highest operational barriers to doing business, with an index of 50.8 points, ranking slightly better only in comparison with Bosnia (46.8), which is a problematic state because of the split in two entities that creates great bureaucratic hurdles. Even Kosovo, a relatively new country, ranks better than Albania, having fewer operational barriers to doing business with. In the country's risk indicator, Albania is the third most negative, after Bosnia and Herzegovina and Kosovo. Fitch Solutions is an industry-leading provider of credit, debt market, and macro intelligence solutions, and the primary distributor of Fitch Ratings content. It is part of Fitch Group, a global leader in financial information services with operations in more than 30 countries. 
            [post_title] => Fitch Solutions: Albania has high political and economic risk
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