Economy in Brief

Tirana Times
By Tirana Times April 19, 2019 10:29

Economy in Brief

Currency exchange rate decline stops

After the robbery of about 10 million euros last week at Tirana International Airport the currency exchanges experienced a drop due to the uncertainties regarding their transferring and as banks were not withdrawing foreign currencies because they could take them nowhere. However, starting this week there was an increased demand for foreign currencies in the market which led to their value increase, regardless that the money transportation issue hasn't been fixed yet. The currency exchange values are found lower in banks rather than in Exchange offices, as bankers claim that pending the settlement of money transfer, banks are not inclined to swap Euros, and this can be a problem for businesses that carry large transactions, while for small exchange traders there will not problems.


Unpaid social security increases to 108 million euros

During 2018 the social security debt reached 108 million euros, experiencing an increase of 18 percent from the previous year. The Social Insurance Institute (SII) said that most of the liabilities are from the public entities and local government, as for private businesses measures through accounts freezing have already be taken, but this approach cannot be taken towards public institutions due to the strategic function they have in services to the public. SII experts claim that unlike other obligations that the state may incur from non-payment of other taxes, the negative effects of the social security debt are multiple. The damage to monetary benefits is far greater than the payment done now and, on the other hand, the social consequences that are created to the persons are immaterial.


High oil taxes are supposedly used on road maintenance

During 2018 Albanians paid 146 million euros on oil taxes which are supposed to be used on road maintenance. The government has imposed a tax of 32.4 lek (0.26 euros) per liter on road users supposedly to cover its expenses on maintenance, however, the government spend only 12 million euros in this direction. On the other hand the Rruga e Kombit highway is self-maintained from the toll-taxes it generates, as the government is planning on introducing toll-payments for all national highways. Thus concerned parties are claiming this tax is both high (estimated the highest in the region) and unnecessary, even though former Minister of Finance Arben Ahmetaj alleged that these money is also being used for other purposes such as road construction, inherited debt clearing, healthcare, and economic aid.


Albania holds a high number on unemployed and unskilled youth

The International Labour Organization has released some data regarding youth employment in Europe for year 2018, where Albania was listed first with 32.8 percent of its youth being unemployed, without some sort of training or skill, and not enrolled in school. The region of Balkans apart from Montenegro, are suffering from this phenomenon of youth unemployment, where Kosovo stands at 30.1 percent, followed by Bosnia-Herzegovina at 26.4 percent, Macedonia with 24.9, and Serbia with 23.8 percent. This youth unemployment is also pushing them towards immigration in the Western Europe where this indicator is lower.


New governmental plan to fix the healthcare system for 2019-2024

The Ministry of Healthcare and Social Protection has been provided a grant by the World Bank for the development of a Masterplan for Healthcare system and services improvement. The project will spend time and money on counseling services with two main objectives, developing a responsive and profitable realistic National Masterplan for health as well as developing a standardized framework for e-health data. Thus setting up a managerial system for the coordination of all included institutions in Healthcare. The plan is expected to cost around 40 million dollars.


Liabilities for PPPs are expected to increase

The World Bank (WB) together with the International Monetary Fund (IMF) said that during 2019 the liabilities towards Public-Private Partnerships (PPP) are expected to increase due to an increased dependence on them for infrastructural projects. These two institutions said that for 2019-2021 the fiscal deficit will also increase as the government is accelerating paying off its arrears. The WB and IMF said that the government should be careful as it has a high public debt, low inner savings, and with a lack of large institutional investors a dependence on foreign funding sources increases. A pressing point apart from undertaken reforms, is that Albania needs to continue its fiscal consolidation and address the risks from off-balance-sheet activities.


Government breaks off 17 hydropower contracts

The Ministry of Infrastructure has undertaken a scanning and monitoring process of various hydropower plants contracts with concessions for their rectitude on contractual obligations. Deputy Minister Hantin Bonati said that under the "Verification of concessionary contracts implementation" law, many violations from the contractors' side were found under the problematics of contractual term violations, and legal and contractual criteria disregard. He said that 17 contracts with such small private hydropower plants companies have been suspended, so that potential financial risks and implications on the state budget can be avoided.


Albania signs new water supply contract with Germany

Minister of Infrastructure and Energy Belinda Balluku signed a contract with German Ambassador Susanne Schà¼tz, in the framework of a program for supplying rural areas non-stop with water. The program includes 160 villages and is expected to cost around 42 million euros. Its purpose is the sustainable improvement of the drinking water supply and the sanitary situation in the coastal areas, by removing the sewage treatment from seashore.

Tirana Times
By Tirana Times April 19, 2019 10:29