Economy in Brief

Tirana Times
By Tirana Times July 12, 2019 12:41

Economy in Brief

Euro enters a downward trend again

After a slight increase in the end of June, the euro depreciated again yesterday (10.07), when it was exchanged for 121.85 lek, about 0.03 points less than the day before, marking the eighth day on the fall. The euros is expected to hold a decreasing trend with the approaching of the VAT payment deadline on July 14, and the insurance payment on the 20th. According to market actors, the European currency will be weak against domestic currency on these dates. The expectations remain low also for August, when emigrants are expected to arrive for their annual holidays. The common currency has traditionally lost points against the Lek during August. The euro's depreciation in the domestic market was also affected by the weak performance it had on international markets where the euro is being traded at 1.12 dollars, from 1.14 dollars at the end of June, fluctuating around the lowest level in the last 12 months. The euro hit the lowest level of ten years in June when it was exchanged for 121.64 lek.


Low consumption affects low inflation

The increase in prices continued at low rates in June, with only 1.3 percent. Growth was driven by food prices which accounted for 70 percent of June's inflation. Market sources claim that low prices are a result of poor consumption on the one hand and abundant agricultural production on the other. The Albanian Institute of Statistics (INSTAT) reported today that the annual change in the consumer price index in June 2019 is 1.3 percent. A year ago this difference was 2.4 percent. Monthly change in the consumer price index in June 2019, compared to May 2019, is -0.3 percent.


Albanians optimistic for economy

Albanians generally expect the economy to go well in terms of the financial situation, economy and consumption. But the history of consumer confidence surveys by the Bank of Albania shows that expectations are generally more positive than reality. The Bank of Albania reported that in the second quarter of 2019, the consumer confidence indicator fell by 2.3 percentage points in the second quarter, halting the upward dynamics of the previous two quarters. The Bank argued that the downward trend in consumer confidence reflected the three downturns: the overall economic situation expected in the country by 4.6 percentage points, the expected financial situation of the household by 3.6 percentage points and the situation of income and expenditure by 1.0 percentage points.


Less businesses deal with research and development

In the field of Research and Development, Albania has consistently attained low scores compared to the region. Data from the Albanian Institute of Statistics (INSTAT) showed that for 2018, research and development utilities fell to 41 units, down by 37 percent. Since 2013, research and development ventures have doubled, however in the last year their number fell. Our country's spending on this field is among the lowest in the world. Even the data published by Eurostat in Albania, the expenditures for this voice were only 0.03 percent of GDP, with an amount less than 500 million lek (4 million euros), out of which 110.5 million lek (900 thousand) went to the Albanian Academy of Sciences and 480 million lek (3.9 million euros) were funds that the Ministry of Education will use the research.


EU innovation project Horizon 2021-7 is ready

The European Commission is preparing the implementation of the upcoming Horizon Europe program, a well-known EU research and innovation program (2021-2027), with a proposed budget of 100 billion euros. The project, which is also directed to Albania, like the previous one will help shape European investment in research and investment in the coming years. Albania signed an agreement with the European Commission to participate in the Horizon 2020 Research and Innovation Research Framework Program (2014-2020) in 2014, that followed the previous FP7 program. The EU Research and Innovation Framework Program Horizon 2020 focuses on the relationship between business and the scientific research community.


EBRD launches green energy project  

The European Bank for Reconstruction and Development (EBRD) and the Green Climate Fund (GCF) signed an agreement that allocates 87 million euros from GCF funds to support the EBRD's sustainable urban growth program. This is the first fund from a total of 228 million euros planned to be invested in several cities around the world, including Tirana. GCF is the largest fund in the world to support the efforts of developing countries to respond to the challenge of climate change and is paying increasing attention to cities. Amongst the countries included in the project, Albania, Armenia, Georgia, Jordan, Moldova, Mongolia, North Macedonia, Serbia and Tunisia, have the right to receive support. This support comes through the Green City Action Plans with comprehensive urban sustainability plans targeting the most pressing cities challenges through investment and policy actions. The plan also includes grants and concessional funds for investments in sustainable infrastructure, technical support and capacity building, and also guidance for cities to enter green funding.


New project to give farmers access to innovation

The Albanian Ministry of Agriculture and Rural Development with the support of the German Society for International Cooperation (GIZ) and the EU funded IPESA project, organized for the first time the Forum on “Agricultural Knowledge and Innovation System” (AKIS). “Within this project we believe that we will be able to make a transformation of Agricultural Extension Agencies as one of the main actors of AKIS in Albania. To further consolidate the development of this sector and to become increasingly competitive in international markets, we must provide farmers with access to Knowledge and Innovation Systems in Agriculture. We need to change the structure for further training of people working in these agencies and for a strategic action plan,” said Dhimo Kote who is deputy Agricultural Minister.

Tirana Times
By Tirana Times July 12, 2019 12:41