TIRANA, April 27 – Albania’s business community is pessimistic when it comes to the business climate, investment and employment prospects for 2016, a survey has found.
Only a quarter of some 600 businesses surveyed in early 2016 said they were planning to invest in new machinery, buildings and staff training for this year, according to an Albanian Business Barometer survey with SMEs and big businesses nationwide conducted in late January 2016 by economist Eduard Zaloshnja. Employment prospects also appear grim as only 14 percent of the surveyed businesses say they plan to hire new staff while 10 percent said they will cut jobs.
Businesses also appear pessimistic about this year’s own performance with about a third expecting a drop in income.
The country’s business climate is also rated as rather unfavorable with 29 percent describing the current tax system as unfair and another 19 percent refusing to give an answer, a refusal which the author says could be politically motivated.
About 46 percent of the businesses said they were fined last year with 80 percent saying they were unfairly punished by state agencies.
One out of five respondents said power supply was unreliable last year and 11 percent of the surveyed companied said they were overcharged by the state-run power company.
The results comes after foreign business communities have voiced concerns over the deterioration of the business climate. Barriers such as corruption and crime, lack of transparency in public procurement, lack of legal security and high taxes make Albania one of least attractive destinations for German investors among 16 Central and South East European countries, according to a recent survey by the German Association of Industry and Trade in Albania.
Other Albanian and foreign business associations have also appealed for measures needed to improve the country’s business environment after Albania lost 35 places to rank 97th out of 189 countries in the latest Doing Business report published by the World Bank.
The appeal comes at a time when the country’s economic sentiment indicator (ESI), measuring both business and consumer confidence, dropped by 5.7 percentage points in the first quarter of this year, plunging below its long-term historical average after three quarters of positive performance.
The Albanian economy registered a significant recovery in 2015 when the GDP grew by 2.6 percent but consumption turned to negative growth rate and unemployment rates registered only a modest decline.
