D&B sees Albanian government expectation of a 5.5 percent GDP growth for 2011 as over-optimistic, saying that it expects the Albanian economy to grow by 3.6 percent in real terms
Tirana Times
TIRANA, March 15 – US-based Dun & Bradstreet has downgraded Albania’s country risk rating amid escalating social unrest following the Jan. 21 violent protests earlier this year which left four anti-government protesters killed.
In a recently released International Risk and Payment Review report, Dun & Bradstreet says it has downgraded Albania’s rating by one quartile to DB4b as the political fight between the Democratic Party-led majority and the opposition Socialist Party becomes fiercer, blocking reforms in the judiciary and the economy which need a qualified majority of votes. Albania is ranked in the group of countries along with Columbia, the Dominican Republic, Indonesia, Latvia, Macedonia and Namibia.
The report provided by D&B partner, Slovenia-based Bonitetna hiۡ I, says the ongoing political crisis since the June 2009 general elections, has blocked key judicial reforms required as a precondition to attain EU candidate status accession also mentioning the loss of 16 million dollars of funds from the US government to establish the administrative court system.
“Such reforms are vital, not only to reactivate EU accession plans, but also in creating a domestic commercial environment based on EU norms and practices, in which potential investors and traders can feel confident when doing business,” says the report, adding that prospects for progress look dim with the country’s political crisis unlikely to be resolved until at least the next general elections.
D&B sees Albanian government expectation of a 5.5 percent GDP growth for 2011 as over-optimistic, saying that it expects the Albanian economy to grow by 3.6 percent in real terms.
D&B also expects the government deficit this year to climb to 3.8 percent of the GDP, above the IMF’s suggested 2.5 percent, a level above which the Fund suggests the public sector will crowd out the private sector for scarce international and domestic credit, despite government’s EUR 300 m Eurobond debut last year.
The budget deficit reduced from 7.1 percent of the GDP in 2009 to estimated 3.7 percent in 2010.
D&B is the leading provider of business information for risk management, sales & marketing, supply management decisions worldwide. More than 100,000 companies rely on D&B to provide the insight they need to help build profitable, quality business relationships with their customers, suppliers and business partners.
Last year, Standard & Poor’s rating agency gave Albania a B+ sovereign credit rating with a stable outlook, citing an increasing public debt and political uncertainty.
The agency also noted that there has been little increase in the country’s prosperity, although it acknowledged that Albania was one of the very few countries in Europe that managed to keep economic growth in positive territory, avoiding recession.
S&P notes that Albanian public finances are characterized by consistently high government debt, despite very strong economic growth.
