Albanian Economy ‘Grew 8%’ in 2008

While recession wreaked havoc in the world economy, Albania registered an eight percent growth in its Gross Domestic Product last year, according to the National Statistics Institute.

However, few economists take seriously the data published by INSTAT, while others have even hinted that it might have been manipulated due to electoral reasons, ahead of the June 28 polls. 

The International Monetary Fund projected growth in Albania for 2008, at six percent of GDP while it slashed last week its economic growth forecast for 2009.

The IMF has revised its prediction of 2 to 3 per cent growth for Albania’s economy in 2009 to between 0 and 1 per cent.

The new projection was announced by Gerwin Bell, the former IMF mission chief in Albania, in a joint press conference with Albania’s Minister of Finance, Ridvan Bode, and the governor of the country’s Central Bank, Ardian Fullani.

“The situation is constantly changing and this figure may change as well,” Bell said.

According to Bell, IMF officials were sent to Tirana to “discuss the problems created by the deteriorating [conditions] in the world economy”.

Albania closed its assistance agreement with IMF last January but the international fund is closely watching the country.

The IMF has advised the government not to increase salaries and pensions and to postpone a projected cut in social security rates. But the centre-right majority government of Prime Minister Sali Berisha remains committed to the salary plans ahead of the parliamentary elections on June 28.

Minister of Finance Bode said the government wants to “boost consumption” in order to tackle the problems created by the global financial crisis, arguing that holes in the budget created by the major downturn would be filled with revenues from privatisation and external borrowing.

The central bank governor, Fullani, said the government should cancel some of its projected investments which are not yet contracted. Bode said budget revenues remained strong and that “a possible revision of the budget is out of discussion” for now.

Albania’s economy grew at an average of five percent in the last decade. It is still performing much better than other counties in the region and, according to IMF, the possibility of negative growth or recession is still out of the question.