FEDERATION OF EURO-ASIAN STOCK EXCHANGES
ANNUAL REPORT APRIL 2009
TIRANA STOCK EXCHANGE
ECONOMIC AND POLITICAL DEVELOPMENTS
Political Environment
During 2008, political environment of Albania
stayed still. The democratic party (DP), which
holds the majority of the parliament (it
currently holds 58 seats), and which is leaded
by the prime minister of Albania Mr. Sali
Berisha in concordance with the opposite
socialist party (SP) ruled by Mr. Edi Rama,
who has governed during the year.
The electoral Alliance for Freedom, Justice
and Welfare, composed of parties
ideologically close to the DP, became the third
biggest political force with 18 seats. Together,
they have an absolute majority in the
parliament and have formed the new
government. These two political forces can
count on the legislative support of some small
right-oriented parties.
As for the leftist camp, led by the Socialist
Party (SP), who has lost the last elections (and
it currently holds 42 seats) is now in
opposition after being in power since 1997.
Both camps are preparing for the 2009
election year by working on new strategies to
gain new positions during the elections.
Despite some misunderstandings, appeared
during the second period of the year between
majority, opposite and one of leftist camp
party’s, leaded by Mr. Ilir Meta, about the
participation parties during the 2009 election
year, we must say that the government has
been consensual and cooperative.
On April 3, 2008 at the Bucharest Summit,
Albania was invited to become a new member
of NATO and since then the government has
been improved being more effective in
achieving their objectives.
Even in time of recession and economic crises
the Albanian government responded promptly
being invariable and taking different measures
to overcome the crises and the instability of
prices that may affect Albania. Such measures
are for example finding new path markets for
increasing the annual exports and national
gross products. Other measures which were
taken during 2008 refer to the vital banking
system which is growing in confidence after
the law adaptation and which obliges all kinds
of economic and finance activities to hold their
activities through the banking system, with
such measure that the government intends to
fight the informal economy.
The government is committed to fight
corruption and crime, reduce poverty and
unemployment, strengthen democracy and
bring Albania closer to Euro-Atlantic
institutions.
The head of state of Albania is the President,
elected for a five-year term by a two-thirds
majority of the parliament. The president has
no legislative or executive power, but
represents the state in foreign relations, and is
chief commander of the army. Since July
2007, Mr Bamir Topi is the President of
Albania. During the year, the President has
named a new legislative general attorney Ms.
Ina Rama who has replaced Mr. Theodhori
Sollaku.
Economic Performance
Albanian economic performance during the
year 2008 stayed strong despite the external
conditions. A regional drought in 2007
affected Albania particularly hard, but the
recovery was rapid as the economy diversified
and new exports markets were developed.
Growth therefore remained buoyant and
became broader based, reaching 6% (real
rate) and 9.9% (nominal rate) during the 2008.
Inflation, while episodically above the 3% +/-
1% target range, remains among the lowest in
the region in spite of global food and
commodity price shocks. In addition, risks to
external and domestic stability have receded
somehow, as domestic credit growth-though
still elevated – has they are decelerated. The
shares of exports of goods and services in
GDP increased 2% compared to the last year,
and Albania continues to attract investments
with its traditional exports, textiles and
footwear. Public finances strengthened, largely
due to improved tax administration, allowing
public debt to remain on a declining path as a
percent of GDP. The monetary policy
maintained positive real interest rates.
Basically, the most part of the Albanian
external debt is caused by the electricity
system precisely by the unpaid electricity
usage; during 2008 several measures were
taken to overcome this problem and the deficit
is decreasing. In fact due to the improvements
in implementing the new rates, capital
spending still falls short of budget plans and
at the current trends the 2008 deficit came
below 5.2% of GDP.
During 2009,growth is expected to remain at
6% with inflation under 4% but risk increased
generally due to the global financial recession
and especially due to the commodity prices,
particularly food prices can put pressure on
domestic prices in short term.*
* Information provided by the Tirana Stock Exchange.
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 Financial Supervisory Authority www.amf.gov.al
Ministry of Economy www.mete.gov.al
2008-ORIGINS OF GROSS DOMESTIC PRODUCT (%)
Services
Agriculture
Construction
Industry
Transport
2008-COMPONENTS OF GROSS DOMESTIC PRODUCT (%)
Private consumption
Public consumption
Gross fixed investment
Exports of goods & services
Imports of goods & services
100
22.8
93.2
80
17.3
40.0
60
40
20
11.0
25.8
22.7
10.4
0
-20
8.9
-40
-60
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