Data indicates the Albanian economy has slowed down compared to the third quarter of 2014 when the economy grew by 3.3 percent as retail sales were up by 6.4 percent and the turnover index rose by 8.7 percent
TIRANA, March 30 – Retail sales and short-term turnover data hint the Albanian economy has made moderate progress in the final quarter of 2014 after growing by an average of 1.35 percent in the first three quarters of the year.
Data published by the country’s state statistical institute, INSTAT, ahead of the publication of the GDP for the final quarter of the year, shows retail sales were up by 4.1 percent year-on-year in the final quarter of 2014 while the turnover index in industry, construction, trade and services increased by only 2.6 percent.
The data indicates the Albanian economy has slowed down compared to the third quarter of 2014 when the economy grew by 3.3 percent as retail sales were up by 6.4 percent and the turnover index rose by 8.7 percent. This means the 2 percent growth target government has set for 2014 remains at risk affected by poor performance in the first half of the year.
INSTAT data shows the volume of retail sales of “food, beverages and tobacco” in specialized and non-specialized stores was up by 11.3 percent compared to the final quarter of 2013, having the major impact on the positive performance of retail sales.
The volume of retail sales of “non-food products” in specialized and non-specialized stores excluding automotive fuel rose by 9.2 percent year-on-year.
The slowdown in retail sales was a result of slight decline in automotive fuel in specialized units which dropped by 0.8 year-on-year and was down by 11 percent compared to the previous third quarter.
Short-term turnover statistics show some of the country’s key sectors such as services and industry and transport registered negative growth rates in their turnover indices while the long-ailing construction sector registered a surprise 19.3 percent increase.
2015 prospects
Albania prospects received a blow in early 2015 when severe floods hit southern Albania, causing considerable damage to the agriculture sector, including local products, livestock and infrastructure, which is expected to have an impact on the GDP growth for this year.
However, top trade partners Italy and Greece escaping recession and the start of the Trans Adriatic Pipeline construction are expected to have a major impact on the Albanian economy in 2015 when government and international financial institutions expect a recovery to 3 percent after sluggish GDP growth rates of 1 to 2 percent in the past three years.
Public debt at around 70 percent of the GDP, non-performing loans at around a quarter, lending struggling to remain at positive growth rates and a slowdown in exports are considered key barriers to Albania’s growth.
Public finances are also suffering in early 2015 with government revenue slightly dropping compared to the first two months of 2014. The value added tax, which is levied at a fixed 20 percent rate on almost every product and service and accounts for more than one-third of total government revenue also slightly dropped by 1.4 percent in the first two months of this year, hinting sluggish domestic consumption, which is the key driver of Albania’s growth.
