Tirana Times
TIRANA, April 12נData published by the Albanian National Institute of Statistics, INSTAT, shows that the country experienced a slowdown of economic activity in the last quarter of 2009. Economic activity decreased by 2.4 percent compared to the third quarter of 2009, while it decreased by 0.8 percent in the fourth quarter of 2009 compared to the same quarter of 2008.
Growth in 2009, based on quarterly data, increased by 3.3 percent compared with 2008. Comparing this quarter with previous one the industries that had growth were industry group with 2.9 percent, trade with1.6 percent and agriculture group by 0.8 percent. Meanwhile, construction and services group continue decreases respectively by 11.8 percent and 4.0 percent.
The sectors with the highest growth rate as compared to the fourth quarter of 2008 were telecommunications, trade and transport respectively with 8.3 percent, 7.2 and 3.0 percent. Construction and industry group had a negative growth rate during this quarter as compared to the fourth quarter of 2008 with respective drops of 14.4 percent and 4.1 percent.
Economic growth depends on improved fiscal policies says BoA
Despite the positive performance of Albanian economy in March 2010, Bank of Albania warned that the negative developments in 2009 need to be seriously addressed. More precisely, the government should take different approach from last year which saw the increase of the budget deficit and the domestic debt which in returned caused a more tightened crediting by banks and a fall in domestic production and consume.
According to BoA, a more conservative and consolidated fiscal policy will lower the costs and interest rates in all banking services, which in return will prove the general liquidity in the financial market. As a result, more financial sources will be available to the private sector.
Overall economic development in 2010 could be favored by an improved climate in international economy, which should increase foreign investments in the country and increase demand for Albanian exports, forecasts BoA. However, the economic crisis in Greece remains a negative factor for both Albania and the region. At the very least, due to the Greek crisis, Albanian economy could be suffering the effects till the end of the first half of 2010. Bank of Albania expects the economy to fully recover only when the tourism season is over in Albania and when the Greek economy stabilizes.
What could be considered more than a consolation is the that Albania has been one of the few countries in Europe to record a positive growth in 2009, despite the fact that the growth rate was cut in half. Thanks to important sectors such as energy and oil & mining, the country continues to attract major investments from abroad.
Yet, the situation remains less than optimistic. The recent investments have done nothing to improve the country’s level of domestic production and employment rates. In addition, a year long political crisis with no end in sight, which is threatening the integration process of Albanian to EU, remains a concern for both investors and consumers.
