Lower consumption also affected unemployment rates in the retail sector which rose by 1.7 percent compared to the first quarter of 2010.
TIRANA, June 24 – Retail sales continued to fall in the first quarter of this year, marking a drop in purchasing power and an ongoing saving trend as consumers expect harsher times ahead. Latest figures published by the country’s Institute of Statistics show retail sales in the first quarter of 2011 dropped by 5.9 percent year-on-year and 12.3 percent compared to the final quarter of 2010. Lower consumption also affected unemployment rates in the retail sector which rose by 1.7 percent compared to the first quarter of 2010. The situation with the “car trade and repair” was the same, with the volume of sales dropping by 1.8 percent compared to the first quarter of last year and unemployment rising by 1.3 percentage points. Meanwhile, fuel retail sales were up 12.8 percent compared to the first quarter of 2010 but fell 5.1 percent compared to the final quarter. Retail sales continued dropping for the third consecutive quarter in 2010, falling by 1.1 percent in the final quarter, despite the country’s economy returning to high growth rates in the second half of 2010. The early 2011 findings by INSTAT are in line with the latest Bank of Albania survey which showed Albania’s Economic Sentiment Indicator (ESI), measuring both consumer and business expectations, dropped by 7.3 percent in the first quarter of this year, extending the gap to 14.7 percent below its long-term historical average. The survey showed the deterioration in the ESI was a result of the ongoing drop in confidence by the service sector and consumers. Confidence in the industry and crisis-hit construction sector grew slightly, but was unable to balance the overall index. The consumer confidence index also continued its falling trend for the third quarter in a row, dropping by 3.1 percentage points during the first quarter of 2011, and remaining 1 percent below its long term historical average. The drop was mainly the result of lower consumer confidence for large purchases, and the deterioration in consumers’ current financial situation– which fell by 6.4 percent and 6.2 percent respectively. Consumers’ assessment of the country’s economic and financial situation registered a drop, with the cost of living reported to have increased compared to the first three months of 2010. Consumers expect the unemployment rate and prices to grow in the next six months. Latest data show the official unemployment rate remained at 13.4 percent at the end of the first quarter of 2011, while the annual inflation rate from February to May 2011 has been up to 4.5 percent and exceeded the central bank’s target by 0.5 percent.
