TIRANA, Nov. 19 – The latest report by the European Bank for Reconstruction and Development (EBRD) highlighted the importance of good governance to ensure better economies. The ” 2019-2020 Report” report released on Tuesday is also titled “Better Governance – Better Economies”.
The report pointed out that poor governance is harmful for three reasons: it creates uncertainty, damages competition and creates unequal conditions.
In the section on Albania, the report stated that after a 4.1 percent increase in 2018, the economy grew by only 2.4 percent in the first half of 2019, and that the slowdown is due to low energy production. Moreover public debt remains high and that over the past year, this debt, excluding arrears, amounted to about 68 percent of GDP.
Data showed that the banking sector is being consolidated, while pointing out that at the same time there is a continuous shift of ownership away from Eurozone banks to domestic and foreign owners outside the European Union. Non-performing loans have halved since 2014, but still remain at high levels.
The EBRD report states that the priority for 2020 should be the government making further efforts to tackle informality, which remains one of the major obstacles in doing business. The report suggests that the government should focus on improving fiscal and public governance standards, urging for immediate attention to improving Public-Private Partnerships and strengthening institutions and the rule of law. Moreover, energy sources need to be diversified by reducing the country’s dependence on hydro power generation and by continuing reforms to improve governance and transparency in the energy sector. The priority for the year 2020, according to the report, should be the improvement of the financial sector, as the banking sector is said to be stable although it still faces many challenges.
