Global financial crisis not to affect Albania directly, say experts

Albania is not integrated in the European banking system and even less so in the American one. Therefore, say experts, we don’t need to fear a financial collapse in Albania. However, Albania is part of the global economy and the impact of the global economic crisis will be felt in the country, more so at the macroeconomic level.
Only recently, BoA governor, Adrian Fullani, warned the public and banks that increase in bad credit might risk a financial collapse of the country and latest reports have revealed that Albanians are spending more than their incomes.
“No need to worry,” says Elvin Meka, Society of Banks General Secretary. “Increase in bad credit can be considered normal phenomena in Albania because it accompanies general increase in credit over the last few years.” Indeed, during the last 5 years, banks have increased their credit by an average of 50% per year and, as a result, bad credit is has also increased. “A second reason not to worry about bad credit,” continues Mr. Meka “is the introduction of the Credit Registry in banks.” The CR keeps information on every client taking a loan from a bank, and this information can be used by banks to cast out bad clients and prevent bad credit in the future. The credit registry should put an end to bad credit practices from banks.
Also to be noted is that the presence of bad credit in Albania is lower then the region or other developed countries.
All new regulatory reforms in the bank system show promise of preventing a possible credit crunch, even though other factors apply in such crisis. According to Anastas Angjeli, former Minister of Finance, bad credit is only one part of the big picture. Even though he emphasizes the need for authorities, public and private, to monitor the banking system in Albania, he also insists that the construction sector and trade (imports) in general may be as problematic. “In the construction sector alone,” says Angjeli, “the bad credit chain is so long that if it collapses it may start a domino effect for the whole economy.”
Albania depends on imports for a good part of its consuming. The global economic crises have raised prices, which, accompanied with the petrol crisis only two months ago, puts a serious risk on Albanian economy. And if that wasn’t enough, price speculations are hurting Albanian pockets more every day. According to Prof. Dr. Anastasi, it is necessary that the government and its institutions step up in order to regulate the market and protect the consumer.
Even though Albania cannot escape damages from the current global economic crisis, experts agree that Government regulatory reforms and a close monitoring of the market might be enough to minimize the impact of such crisis in Albania