Economy in Brief

Tirana Times
By Tirana Times May 10, 2019 14:06

Economy in Brief

EBRD says Albanian economy to slow down on 2019-2020

The European Bank for Reconstruction and Development (EBRD) foresaw that the Albanian economic growth will slow down to be 3.9 percent during 2019 and 2020, versus 4.1 percent so far. The report shows the continuing dangers of the downturn, linked to the economic downturn in Albania's main economic partner, the eurozone. Domestic risks to Albania include high public debt as well as the ongoing domestic political crisis. Kosovo with Northern Macedonia are the only two Balkans countries expected to have a positive economic growth, at respectively 4 percent from 3.9, and 3 percent from 2.7, whereas the rest will experience a slow down in the next two years.


Finances lack 13 million euros

As the economic growth expects a slow-down and the inflation was lowered to 1.7 percent, during the first three months of 2019 the finances are lacking 13 million euros. This came due to a declining performance in VAT revenue by 3.7 percent. This indicator provides nearly a third of budget revenues and is a direct indicator of consumption in the economy. Another factor which affected this financial absence was a decrease of 13.3 percent of national and other taxes  revenue. There has been a positive increase by 20 percent in tax-on-profit revenue, and also an increase by 60 percent in local taxation from the municipal districts. From local taxes there has been a decrease in taxes over real estate properties.


Central Bank currency reserves increase

The Bank of Albania said that by the end of 2018 it had a reserve of 3.4 billion euros, however less in the US dollar and gold currencies. This value increased by 13.4 percent compared to the previous year, as BoA purchased a total of 463 million euros in the domestic foreign exchange market in 2018, where most of this intervention was to curb the euro depreciation, amortize the effects of banks' equity conversion and an EBRD loan, and less to increase its foreign exchange reserves. However, these reserves are sufficient in the event of an unforeseeable crisis and can cover seven months of imports. The minimum of imports coverage should be four months according to a deal with IMF.


Banks clear off almost half of bad loans

The banks have cleared off from their balance sheets 46 percent of the bad loan since 2015 to 2018, or 55 billion lek (445.3 million euros). According to the contribution, the decline in non-performing loans affected their remissions at about 17.6 billion lek (142.5 million euros), the write-offs of the lost loans amounting to 4.5 billion lek (36.4 million euros). The reduction of non-performing loans was accompanied by the faster reduction of credit risk reserves (provisions). Despite the decline in the coverage ratio with provisions, net equity coverage of net loans has improved and collateral coverage remains at high levels. The Bank of Albania notes that despite the improvement, it is necessary for banks to maintain the rates of reducing non-performing loans.


Albanians are using more currency

Tirana University based student center ABC Tirana Club conducted a survey on 550 citizens regarding currency utilization, where it found that 83 percent of the citizens have occurred products priced in euro at least once, and more than half admitted to have occurred store prices in foreign currency more than once. The shops most frequently encountered are mobile phone shops, apparel, apartments, and home appliances. Only 10 percent of the respondent said they opposed when vendors demanded payment in foreign currency, while 79 percent of them were indifferent. This implied that there is a possible growing foreign currency utilization in buying products in domestic stores.


Albania to start 5G procedures in 2020

Albania will start the procedures for the 5G technology in 2020, which allows faster internet through cell phones and other mobile phones. 5G networks are currently being used by several subjects and there will be a financial compensation for freeing it. The money will be taken from the licenses that are going on auction. Companies in Albania are currently using 4G. There is a plan undergoing for the stabilization of these frequencies, by using the antennas that were being used for the analog TV signal.


Tirana incinerator concessionary to build new waste landfill

Integrated Energy BV SPV which is the concessionary company to the Tirana incinerator has recently submitted to the authorities an environmental impact assessment for a part of its project that has to do with the landfill of dangerous non-radioactive waste. An integral part of the concession contracts is the construction of a special landfill site for hazardous, non-radioactive waste. This is the first incinerator to be built in the district of Tirana and it is expected to solve some of the current problematics which has brought a serious issues to the environment and people's health, due to the lack of modern and sanitary systems for the treatment of urban and inert waste.

Tirana Times
By Tirana Times May 10, 2019 14:06