TIRANA, April 2 – The Albanian government says the country’s economy has overcome the pressures from the global economic crisis and returned to its normal performance. This was confirmed last weekend by Finance Minister Ridvan Bode who did not hide his enthusiasm while presenting last March’s economic indicators which proved better than the government had expected.
“The Albanian economy is returning to its best dynamics and the pressures from the global economic crisis are now part of the past for the Albanian economy,” said Bode.
Referring to figures, he announced that revenues in March were higher than the initial government programme. “The customs administration reports a 13 percent increase in revenues in March, or 2.1 billion Lek more than March 2009,” said Bode. The General Tax Directorate has also exceeded its plan, collecting 300 million Lek more than government expected.
According to Bode, the most important element in the recovery is related to the value added tax (VAT) whose collection in March increased by 25 percent year-on-year. The revenues were collected in a month when the import of fuel was 10,000 tons less than in March 2009 which was compensated by an increase in imported machinery and equipment.
The Finance Minister said that the latest economic indicators could bring new scenarios including not cutting budget expenses which government announced at the beginning of the year following the difficult situation in public finances.
Asked if government planned to review the budget considering the positive results of the first quarter, Bode said budget changes were possible if the current indicators were achieved in the coming months.
“The volume of exports during the first three months of 2010 reached 167,000 tons or 74 percent more compared to the same period last year. ‘Made in Albania’ goods during the first quarter of this year reached 28,000 tons, registering an increased of 26 percent year-on-year,” said Bode.
The statistics unveiled by the minister come after two months of falling revenues. Customs statistics show revenues for the first two months of this year reached 15.1 billion Lek (Euro 110 million), the same as last year, failing to grow by 10 percent as government had planned.
The Finance Minister also confirmed the government plan to increase wages and pensions this year. Last month, the International Monetary Fund warned that the Albanian government could not increase wages more than 3.4 percent, the same as the annual inflation rate is projected for 2010.
The IMF has suggested a budget review in the next months should target reducing the deficit to some 3 percent of GDP from a record 7 percent in 2009. “This would lower the financing requirement, support the current account adjustment, and mark a first step toward bringing within credible reach the government’s appropriate goal of cutting public debt, (currently 60 percent) back to 50 percent of GDP by the end of its mandate in 2013,” added IMF.
Despite the significant cuts to the 2010 budget that were proposed in the government’s new Medium Term Macroeconomic Framework, some 30 billion lek or 2.5 percent of GDP, the ongoing revenue trends imply a 2010 deficit of 5.6 percent of GDP, says IMF.
The Albanian GDP is estimated to have registered some 3 percent growth in 2009 and is projected to grow between 2 to 2.5 percent in 2010, according to IMF forecasts. However, the government hopes for a growth of 4 to 5 percent.
Opposition says government hiding crisis
The Finance Minister’s optimistic data of the Albanian economy brought the reaction of the opposition Socialist Party, which says government is hiding the truth about the crisis.
Socialist Party lawmaker Ilir Beqja said the economic data were not intentionally being published by official sources. According to him, the latest data by Albanian economic institutions were those of September and November 2009.
The biggest opposition party is also worried about the loss of 20,000 jobs in 2009 and what it calls the country’s gloomy economic future.
“The latest economic indicators, such as the sales and monetary indicators signal the further curb of the economic growth in the fourth quarter of 2009 and at the beginning of 2010,” said on Monday Mimi Kodheli, another opposition deputy. She also warned of the inflation rate which last February reached 4.4 percent, exceeding the Bank of Albania’s target by 0.4 percent, the shrinkage in consumer loans, falling retail sales and the real unemployment rate, accusing Prime Minister Sali Berisha of being unable to take the country out of the crisis.
