Consumption reduction continues

Tirana Times
By Tirana Times July 5, 2019 12:30

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 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.

 

Tirana Times
By Tirana Times July 5, 2019 12:30