INSTAT talks about a 3,3% economic growth in the last quarter of 2014

INSTAT talks about a 3,3% economic growth in the last quarter of 2014

IBNA Special Report/ IBNA Special Report/ The economic activity in the third quarter of 2014 in volume terms has increased by 3.30 %. Deputy minister of Economy, Ervin Mete analyzes the reasons of this growth: The new economic model has yielded positive effects. The opposition MP, Jorida Tabaku depicts a different reality. Citizens offer more politically unbiased insights and explain why consumption has fallen.

Tirana, January 13, 2015/Independent Balkan News Agency

By Edison Kurani

The Albanian economy ended 2014 with a 3,3% growth in the last quarter. Head of INSTAT, Gjergj Filipi says that this growth came as commerce, hospitality and restaurants, services, industry and agriculture have given a positive contribution in the economy.

All the figures

According to indicator of Gross Value Added (GVA) the economic activity in the third quarter of 2014 in volume terms has increased by 3.30 % compared with the third quarter of 2013. The main contribution to this increase gave the branches of the economy such as Trade, Hotels and Restaurants by 1.71 %, Other Services 1.09 percentage point, Construction by 0.81 %, Industry 0.37 percentage point and Agriculture, Hunting and Forestry to 0.24 percentage point, Post and Telecommunication increased by 0.15 percentage point.

Negative contribute had the branch of Transport by -1.05 percentage point.

The main branches of the economy for the third quarter 2014 compared with third quarter 2013:

Agriculture activity in the third quarter of 2014 compared with the same quarter of 2013 increased by 1.19 %.
The industry group activity increased by 2.45 % in the third quarter of 2014 compared with the third quarter of 2013. In this group, Extracting Industry gave a positive impact which increased by 4.53 %, instead the Manufacturing Industry increased by 0.93 % influenced by sub branch Electricity which had a decrease by 30.15 %.

Construction activity in the third quarter of 2014 appeared to increase by 7.53 % compared with the respective quarter of 2013.

The group of Trade, Hotels and Restaurants in the third quarter of 2014 increased by 10.41 % compared with the same quarter of 2013. In this group, trade had an increase by 11.11 % while hotels and restaurants had an increase by 5.75 %.

Transport activity in the third quarter of 2014 had a decrease by 24.07 % compared with the respective quarter of 2013.

Post and telecommunication activity increased by 5.39 % in the current reported quarter compared with the third quarter of 2013.

Other Services in the third quarter of 2014 increased by 3.76 % compared with the same quarter of 2013. In this group, positive impact gave almost all sectors like: the public administration, health, other collective services, social, cultural services etc. While the negative performance appeared to education, financial sector activities and real estate, rent and business support activities (legal activities, architecture, engineering and financial consulting, commercial, etc).

Changes compared to the previous quarter

As for changes to the preceding quarter, the indicator of Gross Value Added increased by 0.68 % compared with the second quarter of 2014.

Agricultural activity in the third quarter of 2014 compared with the previous quarter decreased by 0.96 %.

The industry group decreased by 2.13 % in the third quarter of 2014 compared with the second quarter of 2014.

Construction activity in the third quarter of 2014 increased by 7.52 % compared with the second quarter of 2014.

The Group of Trade, Hotels and Restaurants increased by 2.61 % in the third quarter of 2014 compared with the second quarter of 2014.

Transport activity in the third quarter of 2014 increased by 0.17 % compared with the previous quarter.

Post and telecommunication appeared to increase by 3.16 % in the third quarter of 2014 compared with the second quarter of 2014.

Other services in the third quarter of 2014 increased by 0.69 % compared with the second quarter of 2014.

Mete: The new economic model gave positive effects

The deputy Minister of Economic Development, Ervin Mete, says that the new economic model has given the positive effects that the government was expecting. Mete says that the latest figures of INSTAT, which suggest a growth of 3,3%, are attributed to government policies, improvement of the business climate and fight against informality.

“Figures of economic growth indicate a satisfactory growth and guarantee the annual objective of 2% growth, as it was forecasted by the International Monetary Fund. Economic growth in the third quarter of 2014 in the third quarter of 2014 has been 3,3%, backed by a quality growth in the sectors of commerce, hotels, processing industry, construction and services. This is a clear indicator of the functioning of the new economic model and the impact that the deep government reforms is having in the economy of the country”, says Ervin Mete.

Ervin Mete ibna

The deputy minister attributes the growth to the reforms that are being delivered: “The government reforms in energy, public finances, in the payment of arrears; the supporting packages for manufacture, agriculture and soon of the plastic industry; the reform in pensions, territorial reform and in general, law enforcement-are the reason behind this growth, but above all, they guarantee a quality and sustainable economic growth in the period to come”.

For Mr. Mete, “the improvement of the business climate, the facilitation of procedures, the tendency of increasing private investments and the strengthening of the basic sectors of economy, show that the country is returning to a consolidated economic growth”.

The opposition sees a dramatic situation

Democrat MP, Jorida Tabaku, says that in spite of the government’s declarations for economic growth, the situation is entirely different. She goes as far as defining it catastrophic. Tabaku says that citizens are facing the destructive effects in the economy of the country and the household economies of the growth of taxes, the failure to decrease price of fuel, as it’s the case everywhere else in the world, the fall of consumption and the ruining scheme of pensions. Tabaku says that the growth of taxes has had a negative effect in the collection of incomes by the government. “Revenues were at least 30 million USD less than planned and almost the same as November last year when taxes were low”, says she.

Tabaku has gloomy projections about the year that has just started. “For the business sector, 2015 started with increased taxes and increased price of energy. We will all pay 25% more for electricity, while businesses will pay 33% more thus having an impact in the increase of the price of goods”.

Citizens complain that prices have increased

While the government talks about a high economic growth and the opposition about a catastrophic situation, citizens are more equilibrated in their opinions. A poll conducted by IBNA with citizens of Tirana, where the cost of living is the highest, shows the problems that people face with increased prices, growth of unemployment, fall of profits, etc.

Stela is a 32 year old woman who has a clothes shop in the city center. She says that she cannot even cover her expenses. “Every two weeks I go to Greece and buy clothes for the shop and this has a cost. Taxes for the shop have increased, but people are afraid to buy. I see that grocery stores manage to sell because people are forced to buy their basic goods. When they enter my shop, they hesitate to buy clothes”, says the shop owner. She says that the current situation is a situation of economic insecurity which constantly grows. “Even during the holiday season, sales have fallen. People are anxious about the future and I can even see this in my family”, says the 32 year old, a mother of a five year girl. When she’s asked about the cause of this situation, Stela says: “Jobs are being cut. Foreign companies are leaving. Migrant workers are no longer bringing money. People are more careful about the future than the present, fearing a loss of job and incomes”. /ibna/