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FEDERATION OF EURO-ASIAN STOCK EXCHANGES SEMI ANNUAL REPORT OCTOBER 2005
TIRANA STOCK EXCHANGE
ECONOMIC AND POLITICAL DEVELOPMENTS
Politic and Economic Environment:
Economic expansion resumed after a period
of contraction prior to 1998, with annual GDP
growth of at least 7% from 1998 through
2001. Albania has been cooperating with the
IMF to restructure its economy as a condition
for receiving both adjustment and poverty
reduction financing.
Among the results to date: the public sector
workforce has been trimmed from more than
900,000 in 1990 to slightly over 200,000, and
broad money supply growth has been more
than halved since 1996. Containment of
fiscal deficits has improved as stepped-up
tax collection efforts produced a marked
improvement in government revenue in 2003.
As monetization of fiscal deficits have been
reduced, inflation has also dramatically
decreased. The official unemployment rate in
2003 was about 16%.
In August 2002, the ruling Socialists made
the decision to combine the functions of the
party chairmanship and the party
premiership in parliament (since the
Socialists were in control of the government,
this meant that the head of the party in
parliament would also be the head of the
government). With this decision made, Fatos
Nano, once again, became the new prime
minister.
Key Information Contacts
Bank of Albania www.bankofalbania.org
Ministry of Finance www.minfin.gov.al
Albanian Institute of Statistics www.instat.gov.al
Albanian Securities Commission www.instat.gov.al
Ministry of Economy www.mepp.gov.al
Chamber of Commerce and Industry www.cci.gov.al
ECONOMIC RATIOS
Domestic
savings
PAGE 132
Albania
Lower-middle-income group
Trade
Indebtedness
Investment
In early 2003, Albania commenced the initial
discussions with the European Union in
regard to the Stabilization and Association
Agreement. These talks were regarded as
the first step toward eventual accession in
the European Union.
In the late 1990s until 2001, Albania showed
steady expansion of gross domestic product
(GDP). Although flooding problems that
plagued parts of Europe in 2002 may have
slowed growth rates, the developments on
the economic front were encouraging.
Economic Performance:
Economic growth increased to approximately
6% in 2003, up from 4.7% growth in 2002.
Whereas droughts, floods, and frequent
blackouts hindered growth in 2002, 2003
saw improvements in the power
infrastructure, which spurred higher exports
and sales in the industrial sector.
Tax receipts also improved in 2003, by 1%.
Improving revenue mobilization has become
a top priority for Albania. Under the most
recent IMF Poverty Reduction and Growth
Facility, plans for a more effective tax
administration include shrinking the large
informal economy making the tax collection
system more consistent and equitable.
GROWTH OF INVESTMENT AND GDP
(%)
40
30
20
10
0
-10
97
GDI GDP
Inflation has consistently remained below
3.5% since December 2002, allowing policy
makers the ability to gradually reduce
interest rates to around 7% by years’ end.
The overall deficit (excluding grants) declined
to between 5 and 6% of GDP in 2003, from
6.3% of GDP in 2002 due to stepped-up tax
collection efforts and constrained public
spending. This movement reduced total
public debt to approximately 61% of GDP. 1
1 Economic and Political Overview, County Watch
Incorporated, 2005
98 99 00 01 02 03
* World Bank reports