Government admits crisis impact in its midyear macro-fiscal review

TIRANA, July 13נThe Ministry of Finance made the latest evaluation regarding the economic crisis affects in the country’s economy. The indicators approved by Ridvan Bode, Minister of Finance, officially recognize that Albania is suffering the impact of the global crisis.
GDP forecasts dropped to 4.8% from the 6% growth rate expected at the start of the year. According to the report, the economic situation changed as a result of the sharp fall in exports, tightening credit in the economy by the banking system, and diminished remittances from abroad.
In addition, the government admitted that many business have already shut down, causing thousand of people to lose their jobs. According to the midyear review, unemployment is expected to rise by another 0.6% from the previous estimation, amounting to 12.9% of the potential workforce in 2009. However, experts estimate unemployment in Albania to be as high as 30%, but real data is hard to estimate due to the large informal economy, measured between 30 and 40% of the GDP. In Tirana alone, capital city of Albania, the number of unemployed is regarded is high as 20,000.
Consumption is also expected to drop sharply as a result of drastic spending cuts by the public and private sectors, including families. Indicators note a general decrease in all economic sectors.
Tax and custom revenues have recorded a decrease of 50 million USD in their expected revenues and losses from remittances amount to tens of millions.
Experts have repeatedly requested an economic development strategy oriented toward manufacturing sectors of the economy, such as construction, in order to open new jobs for the unemployed.
Fresh from wining a new mandate from the June 28th elections, the government seems finally apt to listen and act by recognizing the crisis effects in the country’s economy.