Economy in Brief

Tirana Times
By Tirana Times July 5, 2019 12:07

Economy in Brief

Albanian economic growth halves

TIRANA, July 2- The economic growth during the first quarter of the year is recorded at 2.21 percent. Compared to the same period last year, the growth rate seems to have shrunk by almost half, as the growth performance ni 2018 was recorded at 4 percent. The economic growth last year was driven mainly by electricity generation as a result of favorable precipitation rainfall, which was accounted for as a surplus value and influenced about half of the growth.

However, the energy effect for the first quarter of 2019 has been completed, and thus the contribution of energy and industry to the country’s GDP was negative by -0.81 percent. A reduction was also seen in art, entertainment and recreation, and other service activities by -0.54 percentage points; and the immediate shutdown of gambling also affected by -0.5 percentage points. The sectors that have boosted growth in this period are trade, transport, accommodation and food business with 0.68 percentage points; real estate activities by 0.51 percentage points; construction by 0.43 percentage points; public administration, education and health by 0.36 percentage points; professional activities and services with 0.33 percentage points; agriculture, forestry and fishery activity by 0.26 percentage points; information and communications by 0.24 percentage points; financial and insurance activities by 0.2 percentage points; and net tax on products contributed positively to 0.48 percentage points.


Albania imports 40 percent of energy consumption

During January-April the total energy consumption in Albania was 2.7 million MWh. Domestic production was estimated to 1.6 MWh, while the rest was bought in the open market. For the first time it was also reported a production from photovoltaics at the amount of   6039 MWh. this renewable energy is expected to increase even more once the solar panel park in Akerni is finished. Likewise, a difference in production is expected to be done by the activation of self-productive plants after the solution of the cutoff with the guidance penalizing this category.  


Municipality arrears expand

Municipalities have further expanded the stock of overdue liabilities during the first quarter of 2019, bringing them to 7.2 billion leks (58 million euros). According to the domestic finance report for the first quarter, the stock of liabilities increased by 390 million lek (3.1 million euros) or by about 5.9 percent. 48.2 percent of the stock of overdue liabilities is represented by investments, 20.4 percent from goods and services, about 17.4 percent from court decisions and 11.8 percent from other liabilities. Eight out of 61 municipalities hold about 67.7 percent of the total stock arrears, and about 35.9 percent is held by the Municipality of Tirana.


Bank deposits drop in May

Bank deposits fell for the third consecutive month in May, reflecting mainly the contraction in foreign currency savings. The deposit stock owned by individuals, businesses, state institutions, non-profit organizations, etc., was 994 billion lek (8.1 billion euros) at the end of May. Since January the deposits have shrunk by over 9 billion lek (73 million euros). Compared to April the stock has decreased by 4.5 billion lek (36 million euros), while compared to May 2018 the deposits increased by 2.6 percent. The weight of foreign currency deposits in May was 53.7 percent of the total, from 52.6 percent in the same period of the previous year. Though the Bank of Albania has been campaigning against the high level of Euroization of the economy, foreign exchange savings, mainly in euro, remain preferred, due to the high foreign currency supply in the country and the fact that the low interest rate differential between the lek and the currency does not encourage the depositor to convert the savings to lek.


More business don’t pay state taxes

During the first five months of 2019, 5107 new businesses were added to the list of state tax debtors as published by the General Directorate of Taxes. This number amounts to 67 percent of the total businesses added to this list during 2018 (7588). This clearly points to a stronger growth in the number of ventures that fail to meet their obligations to the state. What was noted was that seven large enterprises (from 87 in total) were added to this list. In total, the business stock that was assigned a security and mortgage lien for unpaid liabilities has gone 26,400.


Insurers’ written premiums increase

The gross written premiums of Albanian insurers increased 7.6 percent year-on-year in the first five months of 2019, reaching 6.8 billion lek (55 million euros), official figures show. Gross written premiums from non-life insurance grew 6.7 percent to 6.2 billion lek (50 million euros), while the life insurance segment earned premiums of 488.5 million lek (3.9 million euros), up 12.9 percent, according to figures published by the Albanian Financial Supervisory Authority. Total gross claims paid increased to 2.34 billion lek (19 million euros) as at the end of May, from 2.26 billion lek (18.4 million euros) a year earlier. The statistics comprise data from eight insurance companies operating in Albania.


Inner migration halves

The domestic movement of citizens in 2018 has halved compared to the previous year, with a total of 26,437 citizens migrating, according to Albanian Institute of Statistics (INSTAT). The number of women who moved last year was 17,378, twice as high as that of men. During 2018 the number of domestic male migrants has declined considerably by 57.3 percent, while that of domestic female migrants was reduced by about 40.4 percent. During 2014-2018, the number of domestic female migrants was higher than the number of male ones, marking 65.7 percent in 2018. The highest number of displaced persons was in 2016 with a number of 57,920 displacements. Even in 2017, the number of internal movements exceeded 50 thousand. The total number of domestic migrants for the past five years is 204 thousand.


Albania with high middle age employees

Eurostat evaluated Albania with over 55 percent employment rate of the age group 55-64 years old. The rates for this age group in Serbia is 45 percent, in Montenegro 43, in Macedonia 40, in Turkey 34, in Kosovo 31, and in Bosnia 30 percent. The high percentage of employment to this age group in Albania is related to the high level of emigration of younger ages. This increasingly growing gap and a recent study point that this year the workforce will fall, facing the country's economy with an unknown phenomenon so far. According to the latest INSTAT projections, the working age population will decline at a slightly faster pace than the general population, with more than 18 percent in almost all districts, except those that increase the population through migration, such as Tirana, Durres and Vlora.


(Note: "Municipality arrears expand" does not appear in print)

Tirana Times
By Tirana Times July 5, 2019 12:07