Economy in Brief

Tirana Times
By Tirana Times March 22, 2019 11:36

Economy in Brief

17 percent of loans are informal

The Bank of Albania conducted a survey during the first half of 2018 with 1200 Albanian families regarding loans. The data gathered showed that 17 percent of the debts families have borrowed are through informal ways, amounting to a 250 million euros. The data also showed that 9.5 percent of the businesses who are under debt, have borrowed it through informal ways. This usury was also pointed out after 12 persons implicated in this business were arrested on March 14 in Shkoder.

 

Albania has the lowest salaries and productivity on region

The International Monetary Fund reported that Albania has the lowest wages in the region with an average pay of 340 euros, when Macedonia is approaching 600 euros and Bosnia over 700. What was noted was a difference between wages which encourages the high level of inequality. This low wages and production come from lack of economic growth the Western Balkan countries are experiencing after the 2018 crisis.

 

122 institution directors to be criminally prosecuted

The State Supreme Audit Institution is requesting the criminal prosecution of 122 institution chiefs due to a 213 billion lek (1.7 billion euros) economic damage for 2018. This damage comes from mismanagement of state property, corruption with concessions and in the Customs, and lack of productivity from the public administration, especially in the State Tax Agency, which held the first place of economic damage with 13.2 billion lek (105 million euros).

 

Albania and Montenegro receive the least funds from EU

Albania is one of the signed countries in Horizon 2020, the biggest EU Research and Innovation programme that promises more breakthroughs, discoveries and world-firsts by taking great ideas from the lab to the market. The program offers funding for seven years along with private investments. Research and innovation development is one of the EU accession conditions that Albania and other candidate countries have to fulfill, however, Albania so far has received only a 0.01 percent of the 80 billion euros budget provided for the program, whereas Montenegro has received a 0 percent investment.

 

Albania is experiencing population aging

Data from the Albanian State Institute of Statistics (INSTAT) show that Albania will have a median age of 41.1 years old by 2031. The current median age is 35.4, whereas in Europe is 42 years old, making the oldest continent in the world. INSTAT claims that this phenomenon also impacts an increase in the elderly dependency ratio (65+ years old), reaching a 35 elder persons per 100 persons in working age. The youth dependency ratio (0-14 years old) will remain stable with 25 young persons in 100 people in working age.

 

45 percent of employers are uneducated

A World Bank study shows that 45 percent of people employed in Albania have a minimal middle school education. The regional median is 22 percent. The majority are women, and the labor force in Albania has more women with middle-school education than university graduates. This also impacted Albania to provide more jobs for people with this level of education for the past year, rather than for those with higher education.

 

The strategy for financial management changes

The Ministry of Finances has revised the strategy for public management including the PPPs due to the negative impact these contracts have on the country's fiscal stability. International Financial Institutions, the World Bank and the International Monetary Fund will assist the Albanian government until 2022 on a series of new laws and regulations aimed at reducing public debt, reducing arrears and keeping fiscal risks under control. A new chapter has been added to the strategy, which aims to keep Public-Private Partnership concession contracts under control.

 

Albanians are getting poorer

The net financial wealth of Albanian households in relation to GDP has been decreasing since 2014. According to data from the Bank of Albania, the net financial wealth of Albanian households in 2014 was 113 percent of GDP, in 2017 it was only 100 percent of GDP. There was an annual 2 percent decrease in the household wealth. For households, financial assets substantially exceed liabilities, mainly due to the high level of investment in the form of deposits and investments in the form of equity participation in nonfinancial corporations.

 

Tirana Times
By Tirana Times March 22, 2019 11:36