TIRANA, Nov.26- The elimination of custom fees for all products of European Union countries will bring the deepening of Albania’s trade deficit, which in turn will affect economic growth. This might result in lower than the six percent forecasted growth rate in 2008, announced the finance Ministry in the accompanying reference to the draft budget for next year. This is the first time the effects of the Interim Agreement have been analyzed in this macro perspective of slowing down growth. The agreement has been implemented since January of 2006. Albania is also part of CEFTA and has eliminated custom fees with all countries with which it has signed free trade agreements.
Trade deficit risk
Explaining the risk to economic growth from a deeper trade deficit, the Finance Ministry predicts that this upcoming year the effect is expected to be larger due to a higher penetration in our market of European goods and products in general. Albanian exports, at least in the short term, cannot make up for this effect because they are not competitive enough. 2007 has shown that the trade deficit is only going to get worse. In the first three quarters the deficit has totaled 1.5 billion euros, 25 percent higher than the same period last year.
Additional risks
Energy shortages and rising oil prices are also part of the risk analysis that the Finance Ministry has compiled regarding economic growth. The energy crisis can continue in 2008 as internal demand goes up and the production capacities are still left outdated and at the mercy of rainfall. Experts note the imports are programmed non-schematically and the regional situation is bleak. Energy projects that are on the table now will need more than one year to show positive changes. The oil prices are completely beyond Albanian influence and will depend on international markets, however, the fragile tendency that oil prices have to world political situations and global demand have shown that they are expected to be high during 2008 as well.
