The Albanian economic situation

Corsican In recent years Albania has achieved important goals on the economic front, thanks to structural reforms and stabilization of economic policies implemented by the government. These policy measures are primarily economic allowed the containment of inflationary pressures and a considerable reduction in the public deficit. The level of economic activity has remained high, registering an annual growth of Gross Domestic Product (GDP) around the average of 7-8%.
Even on the face of the international trade situation has presented significant improvements, with an increase in foreign Albanian investment and remittances from emigrants, which resulted in an increase in foreign currency reserves, while the exchange rate has remained stable.

Growth in Albanian manufacturing

In 2001 the Albanian GDP reached 4.2 billion worth U $ D, an increase of 7.3% over the previous year. The good results achieved in 2001, following the positive performance of the three years 1998-2000, when the Albanian GDP has experienced annual increases of 7-8%. Beginning in 1997, when production was affected by the political and financial crisis caused by the collapse of pyramid, the product expressed in the national currency has increased by more than 70%.

Important Albanian sectors

The Albania continues to be a predominantly agricultural country. Indeed, agriculture still contributes about 50% to the entire Gross Domestic Product, and employs approximately 55-60% of the workforce. The manufacturing sector contributes only for 11-12% of GDP to education, also opposed highlighting trends in its two major sub-sectors. In fact, since 1997 there has been a gradual decrease in production in public enterprises (with a few exceptions) to which was the counterpart of a significant increase in private. The construction sector has proved to be among the most dynamic, with annual growth rates between 15% and 21% over the four years. As a result of this strong growth, currently the construction sector contributes more than 15% of GDP to education. In recent years, the transport sector and other service activities have also registered a significant growth.

Albanian Employment

During 2001 the unemployment rate decreased by about two percentage points compared to the previous year, reaching 14.4%. The government has also planned to increase the financial resources to support and promote effective employment policy.
The decline in unemployment is the result of different dynamics: in fact, while the number of employees in the public sector has been further reduced, those employed in private extra agricultural activities are considerably higher. The number of those employed in agriculture has remained essentially unchanged.

Albanian International trade

During the year 2001 while imports amounted to about 1,332 million U $ D, while exports have reached the level of 305 million U $ D. The resulting trade deficit, which amounted to 1,027 million U $ D, marked a deterioration compared to that of 2000, when the deficit was equal to 814 million U $ D. Despite improvements in the functioning of customs, it may be presumed that the official data on imports real flows. Similar considerations apply to exports, the value of which is sometimes artificially depressed by the exporters for tax reasons.The main trade partner of Albania continues to be Italy, which provide approximately 33% of imports and who have designed more than 70% of exports. In second place are the Greece with 29% of imports and 12% of exports.
Exports Albanians relate mainly clothing and footwear (about 60% of the total), while machinery, foodstuffs and manufactured goods typically constitute the bulk of imports.

Albanian Foreign investments

Based on preliminary data currently available (March 2002), in 2001 the flow of foreign Albanian investment has amounted to about 220 million U $ D, with a considerable increase compared to the level of 2000, when Albanian investment were recorded for 141 million U $ D. Since 1993, when it began to track the flow of foreign investment, a total of over 700 million U $ D was invested in Albania by foreign operators. The increase in foreign investment in recent years is largely linked to the phenomenon of privatisation. In fact, significant revenue has been generated from the sale to foreign investors of both the National Commercial Bank that of Albanian Mobile Communications.

The Albanian financial sector and the Albanian banking system

Currently operating in Albania a dozen commercial banks. The market is largely dominated by the Savings Bank, the largest bank in terms of the Albanian presence in the territory and money, and the National Commercial Bank (NCB). Overall, the activities of these two banks amounted to about 80% of total banking activities. Formerly state-owned, the NCB was privatized in June 2000, but will privatize Savings Bank.
The first Albanian bank with foreign participation was the Italian-Albanian Bank (BIA), created in 1994 as a joint venture between the Bank of Rome and the NCB, with a minority shareholding of the European Bank of Reconstruction and Development (EBRD). Another joint venture bank is the Arab-Albanian Islamic Bank, originally created by the NCB and several Arab investors. It needs to be noted that to date there is no bank that allows Albanians living in Italy to send remittances in Albania, since not present on the spot. By way of comparison, which is observed about half a dozen Greek banks have already opened their offices in Albania, even fairly widespread in the territory, in order to allow remittances of immigrants.A chance not grasped by the Italian banking system, in this respect not forget that immigrants remittances are a crucial source for the Albanian GDP.

Albanian privatization and structural reforms

The Albanian authorities are determined to strengthen the banking system through privatization of the remaining banks to public ownership and improving the regulatory framework in the sector. In this direction, a significant support has been provided by international financial institutions like the International Monetary Fund, the World Bank and EBRD, and some bilateral donors.