Experts: Slowdown a reality that must be reflected in policies

TIRANA, April 23 – The slowdown in Albania’s economic growth is a reality that must be taken into consideration when drafting budget and fiscal policies, Albanian experts have warned after international financial institutions have downgraded the country’s 2012 GDP growth forecast to as low as 0.5 percent compared to government’s overoptimistic scenario of 4.3 percent.
Ardian Civici, a member of the Bank of Albania Supervisory Council, says adjustment and realism to the new economic growth must be reflected in all reviews of the budget, its use including expenditure cuts. “It seems that the gist of all reforms is not only austerity or tight budget policies, caution to the macroeconomic equilibrium or control on public finances, when everybody’s attention is focusing on the factors that stimulate economic growth.”
Artan Gjergji, another economic expert considers the EBRD forecast of a 1.2 percent growth rate as more probable compared to IMF’s highly conservative 0.5 percent rate as the worst possible scenario.
Experts say the slowdown in Albania’s growth during the past 3 years reflects not only crisis impacts but also the slowdown in the cycle of some important economic sectors.
“The slowdown also reflects the exhaustion of some traditional economic factors” says Fullani, adding that its high time new sources of growth were identified.
The construction sector and migrant remittances, two of the key drivers of the Albanian economy have been constantly shrinking since 2008.
Referring to concern by international financial institutions over Albania’s public debt, currently close to the legal ceiling of around 60 percent of the GDP, Artan Gjergji says the Albanian government must cut public spending and find ways to increase budget revenues.
Arben Malaj, an opposition Socialist Party MP and former Finance Minister says public debt, rising deficit are the most serious threats to the Albanian economy, worried over the possible manipulation of these indicators.