Download - FEAS xxx.fh9
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FEDERATION OF EURO-ASIAN STOCK EXCHANGES SEMI ANNUAL REPORT MAY 2005<br />
TIRANA STOCK EXCHANGE<br />
ECONOMIC AND POLITICAL DEVELOPMENTS<br />
Politic and Economic Environment:<br />
Economic expansion resumed after a period<br />
of contraction prior to 1998, with annual GDP<br />
growth of at least 7% from 1998 through<br />
2001. Albania has been cooperating with the<br />
IMF to restructure its economy as a condition<br />
for receiving both adjustment and poverty<br />
reduction financing.<br />
Among the results to date: the public sector<br />
workforce has been trimmed from more than<br />
900,000 in 1990 to slightly over 200,000, and<br />
broad money supply growth has been more<br />
than halved since 1996. Containment of<br />
fiscal deficits has improved as stepped-up<br />
tax collection efforts produced a marked<br />
improvement in government revenue in 2003.<br />
As monetization of fiscal deficits have been<br />
reduced, inflation has also dramatically<br />
decreased. The official unemployment rate in<br />
2003 was about 16%.<br />
In August 2002, the ruling Socialists made<br />
the decision to combine the functions of the<br />
party chairmanship and the party<br />
premiership in parliament (since the<br />
Socialists were in control of the government,<br />
this meant that the head of the party in<br />
parliament would also be the head of the<br />
government). With this decision made, Fatos<br />
Nano, once again, became the new prime<br />
minister.<br />
Key Information Contacts<br />
Bank of Albania www.bankofalbania.org<br />
Ministry of Finance www.minfin.gov.al<br />
Albanian Institute of Statistics www.instat.gov.al<br />
Albanian Securities Commission www.instat.gov.al<br />
Ministry of Economy www.mepp.gov.al<br />
Chamber of Commerce and Industry www.cci.gov.al<br />
ECONOMIC RATIOS<br />
Domestic<br />
savings<br />
PAGE 126<br />
Albania<br />
Lower-middle-income group<br />
Trade<br />
Indebtedness<br />
Investment<br />
In early 2003, Albania commenced the initial<br />
discussions with the European Union in<br />
regard to the Stabilization and Association<br />
Agreement. These talks were regarded as<br />
the first step toward eventual accession in<br />
the European Union.<br />
In the late 1990s until 2001, Albania showed<br />
steady expansion of gross domestic product<br />
(GDP). Although flooding problems that<br />
plagued parts of Europe in 2002 may have<br />
slowed growth rates, the developments on<br />
the economic front were encouraging.<br />
Economic Performance:<br />
Economic growth increased to approximately<br />
6% in 2003, up from 4.7% growth in 2002.<br />
Whereas droughts, floods, and frequent<br />
blackouts hindered growth in 2002, 2003<br />
saw improvements in the power<br />
infrastructure, which spurred higher exports<br />
and sales in the industrial sector.<br />
Tax receipts also improved in 2003, by 1%.<br />
Improving revenue mobilization has become<br />
a top priority for Albania. Under the most<br />
recent IMF Poverty Reduction and Growth<br />
Facility, plans for a more effective tax<br />
administration include shrinking the large<br />
informal economy making the tax collection<br />
system more consistent and equitable.<br />
GROWTH OF INVESTMENT AND GDP<br />
(%)<br />
40<br />
30<br />
20<br />
10<br />
0<br />
-10<br />
97<br />
GDI GDP<br />
Inflation has consistently remained below<br />
3.5% since December 2002, allowing policy<br />
makers the ability to gradually reduce<br />
interest rates to around 7% by years’ end.<br />
The overall deficit (excluding grants) declined<br />
to between 5 and 6% of GDP in 2003, from<br />
6.3% of GDP in 2002 due to stepped-up tax<br />
collection efforts and constrained public<br />
spending. This movement reduced total<br />
public debt to approximately 61% of GDP. 1<br />
1 Economic and Political Overview, County Watch<br />
Incorporated, 2005<br />
98 99 00 01 02 03<br />
* World Bank reports