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EBRD: Albania’s Economy Slowing Down
Tirana, 21 Oct. 2009 (AE) Albanian economy experienced a good growth rate in the first half of this year, but in two remaining quarters growth will slow, projects the European Bank for Reconstruction and Development, EBRD.
“We have seen a strong growth of 4 to 5 per cent in the two semesters from January to June, but after that the tendency is negative, so we expect 3 per cent growth for this year,”said Daniel Berg, head of EBRD office in Tirana for Top Channel TV.
“So we are seeing a strong contraction now and this [negative] tendency will continue in the next year, when economic growth will slow to 1.6 per cent,” he added.
The biggest concern for EBRD currently is the sharp increase in public spending.
“There are some risks related to the external trade deficit, while the government deficit is also increasing and this is not an alarming situation but it is enough to be concerned,” Berg said.
“The government should oversee its spending and could cut some spending this year or early in the next year, if revenues do not increase,” he added.
Albania’s public sector has seen 23 per cent increase in expenditures and only 6 per cent increase in revenues as for end of September, thus running an expected deficit of 6.4 per cent of the GDP for this year. During the last months, government revenues slowed, thus indicating deteriorated economic environment.
According to EBRD estimates, Albania will enjoy 3 per cent growth in the gross domestic product this year, while the whole South East Europe region will suffer a 6 per cent fall of GDP.
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