Albania’s economic growth in the first quarter was the same as Serbia and Iceland but lower than Macedonia’s 5.1 percent and Turkey’s double-digit growth of 11 percent
TIRANA, July 13 – Albania registered one of the highest GDP growth rates in 2010 among candidate and potential candidate countries but growth in the beginning of this year has decelerated. Data published in a European Commission report show Albania’s real GDP grew by 3.4% year-on-year in the first quarter of 2011, decelerating from 5.6% in the final trimester of 2010. The growth in the first quarter was the same as Serbia and Iceland but lower than Macedonia’s 5.1 percent and Turkey’s double-digit growth of 11 percent. Only Croatia registered negative growth rates in the first quarter of 2011 whereas data for Montenegro, Bosnia and Herzegovina and Kosovo were unavailable. “The slower pace of economic activity was due to lower growth in the industry, trade, hotels and restaurants and transport sectors which together account for some two-fifths of output,” says the report. The report also cities the slowdown in revenues in the first five months of this year especially from VAT and excise taxes partly reflecting the continued weak domestic demand. In Albania, the increase in revenues in the period January-May was very modest while expenditure growth was high, leading to a widening budget deficit. Total expenditure during this period also rose 10 percent taking budget deficit to 20.5 billion lek, or 2.5 times more than the same period in 2010. Net FDI in the first quarter of 2011 was around one-third that registered in the corresponding period of 2010. Although FDI inflows increased year-on-year, a significant amount of foreign capital was repatriated resulting in a sharp drop in net FDI. Latest data made available by the European Commission’s Directorate General for Economic and Financial Affairs show Albania’s 2010 economic growth at 4.1 percent was not high enough only compared to EU candidate Turkey whose GDP is estimated to have grown by a record 8.9 percent and Kosovo’s 4.6 percent. Only Croatia and Iceland recorded negative growth rates of -1.2 and -3.5 percent respectively in 2010 while growth in Bosnia-Herzegovina, FYROM, Montenegro and Serbia varied from 0.7 percent to 1.8 percent.
