Cautious about economy, businesses lower investments

TIRANA, June 1 – The latest report by the Bank of Albania shows that Albanian companies have drastically lowered their investments into the business, adopting a wait and see attitude during the economic crisis.
More than 64 percent of Albanian businesses have not made any investment in six months, according to the latest survey of the Bank of Albania
The central bank’s report shows that during the first quarter of 2010, imports of capital goods, machinery and equipment used for investment had dropped by 22 percent compared to the same period last year.
In certain sectors, particularly construction, the business sector is suffering from a lack of liquidity. Other businesses are simply choosing to be cautions until they think the economy improves further.
The government too has been lowering its investments, having less money in its coffers with which to offer the economy a stimulus. In the first four months of the year, public investment was 11.5 billion leks lower than a year ago.
The government spent heavily last year ahead of the elections, and had to lower the investments when it too had liquidity problems related to the global economic crisis.
The European Bank for Reconstruction and Development has warned that 2010 will be harder on the Albanian economy than last year.
And competitiveness remains a problem too.
In addition to lack of investments, the medium and small enterprises in particular are having problems being competitive in the market due to not being able to use technological innovations.
Albania’s lack of major infrastructure and business incubators leads to the fact that there is very little development and invocations. There is also a lack of an active collaboration between universities and businesses on innovation.