“In 2013 as a whole, GDP growth was stronger than expected in all pre-accession countries, except in Albania which was the sole country where the growth rate declined in 2013,” said the European Commission in its quarterly report.
TIRANA, April 7 – Having been one of the best performing economies among EU aspirants from 2009 to 2012, the Albanian economy dropped to the worst performer among eight remaining EU candidate and potential candidates in 2013, according to a European Commission report. At 0.4 percent, Albania registered the lowest growth rate in the past five global crisis years, losing its pace as one of the best performers and the only pre-accession country along with Kosovo to register positive growth of 3.3 percent in 2009.
The 2013 growth rates among EU aspirants ranged from a low of 1.5 percent in Bosnia and Herzegovina to 4 percent in Turkey.
“In 2013 as a whole, GDP growth was stronger than expected in all pre-accession countries, except in Albania which was the sole country where the growth rate declined in 2013,” said the European Commission’s Directorate-General for Economic and Financial Affairs in its quarterly report.
“Only in Albania did growth decelerate (to 0.4 percent), after the economy contracted by 2.5 percent in the third quarter and recovered only modestly (+1.1 percent) in the fourth one,” said the report.
While inflation rate dropped to 1.9 percent, which is below the below the lower limit of the central bank’s target range of 2 to 4 percent, unemployment rate rose to 16 percent, up from 13.9 percent in 2012.
“Due to a surge in VAT and excise revenues at the end of the year, which might have been related to the anticipation of tax changes taking effect in 2014, and thanks to the curbing of capital expenditure, the eventual budget deficit in 2013 was 4.8 percent of GDP. It was thus somewhat better than the revised target of 6.2 percent from October, but exceeded the initial target of 3.5 percent,” says the report.
Albania’s public debt, estimated at 65.2 percent of GDP without the accumulated government arrears, is the highest in the region and lower only compared to Iceland’s 81 percent.
Albania and Serbia have the highest rate of non-performing loans with 24.3 percent and 21.1 percent respectively, leading to credit constraints that weigh on the corporate sector and on the reallocation of resources towards tradables.
While Croatia has already joined the EU, only Albania, Bosnia and Herzegovina and Kosovo remain the only potential EU candidates with all others having already obtained EU candidate status.
Albania’s GDP per capita expressed in purchasing power standards remained unchanged at 30 percent of the EU-28 in 2012, ranking on the bottom of 39 country-list, according to a report published by Eurostat, the statistical office of the European Union.
The report measuring GDP per capita in purchasing power standards, an artificial currency unit that eliminates price level differences between countries, shows that at 30 percent of the EU-28, Albania’s GDP per capita ranks better only compared to peer EU potential candidate Bosnia and Herzegovina 29 percent but lags behind four other EU candidates Macedonia, Serbia, Montenegro and Turkey whose GDP per capita ranks from 35 percent to 54 percent of the EU 28.
