Albania, Too, Swamped By Global Crisis

TIRANA, Feb 23 – Albania has yet to feel the real consequences of the global crisis. The local authorities still ‘boast’ of having the highest GDP growth in 2008 (9.9 percent) in Europe.
For the moment it is already having some negative effects, first seen with a significant devaluation of the local currency, the lek, in the last two months. From $1 = 80 leks last November, now it is $1 = 100 leks, with the same devaluation with the euro but not to that level (1 = 122 leks in Oct, Nov and now 1 = 130 leks).
“The Albanian economy is now affected from the second level of the global crisis that has covered the developed countries,” said The Governor of the Central Bank of Albanian Adrian Fullani on Monday, adding they are to continue in the near future.
The governor said they had registered a “dryness” of the hard currency entering the country and an increase of the current deficit. Exporting has still slightly increased but not at the same level as noted earlier.
The governor urged the exporting businesses to adopt a careful policy of preserving their liquidities, increase products and look for new markets.
The governor also urged commercial banks not to stop crediting of exporting businesses.
He added there was seen and it would be expected, a fall of the remittances from the Albanian immigrants, that have normally been at 13-14 percent of the GDP (or about 1 billion annually and more).
Authorities are also expecting a fall of the foreign direct investment.
Only in the last three months Albanian authorities have signed deals with different international companies up to 3.5 billion for projects in the energy sector.
But they are yet to start the projects and, as the political opposition says, their projects may be re-planned due to the world crisis.
Local businesses have continuously called on the government and fiscal authorities to apply lenient tax services.
At the end of January and strong pressure the Central Bank cut the repo rate by up to 0.5 percentage points to 5.75 percent, from the 6.25 percent it had been since November 2007.
Local businesses and banks say there is reduction in industrial production, job loses and lower remittances.