Economy in Brief

Tirana Times
By Tirana Times April 5, 2019 11:52

Economy in Brief

Hungarian OTP Bank enters Albania

Hungarian OTP Bank was officially introduced in Albania on April 3, after having bought 100 percent of the Societe Generale shares for 40 million euros. CEO Sandor Csanyi expects a return on investment within five years and plans an expansion (not necessarily buying another bank) by making his bank one of the largest in the country. CEO for the Albanian filial Bledar Shella said that OTP is the fifth largest in the region, and for Albania it plans to increase loans, open new branches and invest in digitalization. Csanyi said that the bank will be investing in agriculture, industry, bread production, but mostly create a Hungarian business market in Albania.


New Tirana-Zurich airline established

The Mother Teresa Airport in Tirana (TIA) started on April 1 a new flight route to Zurich. This flight will be twice a week for all passengers flying both as from Switzerland and Albania. This new line comes in collaboration between TIA and the SWISS airline operated from Edelweiss. This new service and collaboration was appraised by the Ambassador of Switzerland in Albania Adrian Maitre, whereas TIA's CEO Rolf Castro-Vasquez said that new flight routes are expected to operate soon.


High energy import causes a crisis in the sector

Albania is facing an energy production crisis as the main hydropower of Fierza registered a water quota at 269 meters in April 2019, 20 meters below the annual average of 289.5 meters. The situation is concerning as Spring has historically lacked rain showers. The Albanian Power Corporation produces through its three hydropower plants in the cascade of Drin (Fierza, Koman, Vau i Dejes), only 25 percent of the whole energy consumption within the country. The rest is imported and/or bought in private hydropowers. The Electricity Power Distribution Operator (EPDO) said that as of April 2019 the energy import bill amounted to 100 million euros plus VAT. The EPDO has foreseen that until Fall there will be minimal energy production and it is seeking investments and government funding for energy importing.


2018 budget in Albania spent mostly in public investments

In World Bank's periodical report for public spending in the region of Balkans it was estimated that the budget of 2018 for the countries in the peninsula was spent mostly on wages, pensions and social welfare. Exceptions made Albania which spent most of its budget for concessions and public private partnerships in Tirana, and for Montenegro which is investing in the joint highway with Serbia. Thus in these two countries the public debt remains quite high. The World Bank has warned against the PPPs for bearing fiscal risks, creating spaces for corruption in the private's benefits in the risk of the state's budget, and they could also increase the public debt.


Oil, tobacco, beer and coffee consumption are lowered

The excise products of oil, tobacco, beer and coffee faced lower consumption during the first months that generated little money in the state budget, reflected also by reduced imports in the country. Oil imports dropped by 14.7 percent, due to the inner production by ARMO. Tobacco imports were also lowered by 2.4 percent, reflected also by the rising prices. Beer products which have surpassed the local productions in sales and consumption, were also faced by a 20 percent decline in imports. All these have affected in 114 million lek (911 thousand euros) less revenue in excise products for the Customs.


New reform to shorten funds for people with disabilities

4.8 percent of Albania's population or 141,740 people suffer from some sort of physical or mental impairment. They benefit from social security, in case their impairment was caused by work, or other social protection schemes for their personal expenses, medication, and caretakers. The Ministry of Health seeks to undertake a new reform that will cut 27 percent of its funding for persons who display light impairments by 2024, and instead to integrate them in them working market through educational, professional trainings, and employment promotional programs.


Agribusiness investments increased

Raiffeisen Bank Albania and the European Bank for Reconstruction and Development (EBRD) have launched a program for the benefit of local agribusinesses and farmers, especially those in isolated areas, with funding opportunities. The EBRD and the Albanian government support the loan portfolio of up to 35 million euros for loans in the agribusiness sector by sharing the risk with its partner Raiffeisen Bank Albania, and also provides Coverage for Loss Prep, a contribution of the Albanian government. This program was created in 2016 and seeks to raise the agriculture contribution to the GDP, which currently is 20 percent.


Albania with above-average substance use

Our World in Data has released numbers concerning alcohol and drug substance use. As of 2016, 2 percent of the entire population of Earth or 164 million people had some sort of substance use. The region of Balkans had a 2.58 percent average in alcohol and drug use, with on top of the list being Bosnia with 3.53 percent, followed by Montenegro at 2.47 percent, and then Albania with 2.33 percent of the population suffering from an alcohol or drug use disorder. Eastern Europe generally has the highest substance use disorder percentages, with Russia being the first in the world at 5.93 percent of its population, followed by USA at 5.47 percent.


Tirana Times
By Tirana Times April 5, 2019 11:52