FEAS Yearbook FEAS Yearbook 2009 | Page 132

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 PAGE 130 -47.6