INSTAT reports controversial GDP growth of 6% in the first quarter of 2009

TIRANA, July 15؎ational Institute of Statistics (INSTAT) published this week the economic report for the first quarter of 2009 reporting an economic growth of 6% in the first three months of the year compared to the same period last year.
All sectors of the economy scored significant growth rates with the exception of industrial production which fell by 13.2% on an annual basis in the first quarter of this year.
In the rest of the sectors, according to INSTAT data, agriculture production increased by 3.5%, construction by 8%, commerce with a slight 0.9% increase, transportation by 3.3%, and the service sector with growth of 15.3%. The post-telecommunications sector recorded the highest growth of 22% on the year from January to March 2009.
INSTAT reported that given the GDP growth of 6%, the economic progress of the country remains satisfactory and promising. Such a statement is seen to oppose the Bank of Albania’s (BoA) declarations only a couple of days earlier which stated that economic activity is slowing down as a result of the global economic crisis.
“The latest developments in the last quarter of 2008 and the first months of 2009 show that economic growth in 2009, even though it will remain in positive levels, will be significantly lower. Reasons behind the slowdown in economic growth are based on the fall of income for domestic economic agents that interact with international markets and with the general tightening of financing in the economy by the banking system,” declared Ardian Fullani, BoA’s governor earlier this week.
According to the governor, the global economic crisis will intensify its effects in the real economy of the country. He observed that the business sector is struggling with increased financial difficulties in the current situation and it lacks short-term optimism, conclusions drawn from a business survey the BoA made public a month earlier.
In concert with Fullani, Minister of Finance, Ridvan Bode admitted for the first time this year that Albania is indeed vulnerable to the global crisis affect and the midyear review published by the ministry lowered its 2009 GDP growth forecast to 4.8% from 6% it predicted earlier this January. Other foreign institutions are less optimistic regarding the economic progress with forecasted growth rates varying from 0.2 to 3%.
The methodology used by INSTAT to measure economic indicators remains in dispute despite the IMF’s recognition that efficiency has improved.
Albanian Union Confederation (KSSH) reacted to INSTAT’s report through its chairman, Kol Nikollaj, declaring that the data has been politically inflated.
“Unfortunately, Albania will close this year in economic stagnation, not matter the extent of data manipulation which has lost all public credibility. 2009 GDP growth will more likely be within IMF and World Bank forecasts of 0.2-0.4%,” said Mr. Nikollaj.
The KSSH chairman pointed at the increasing rates of unemployment in the last months.
“In textiles 25% of employees have lost their jobs, another 20% in the mining industry, and construction has cut 15% of its workers. Employment in Albania floats around 30-36% depending on the region,” concluded Nikolla