Albania 

Albania country policy

Policy established 08 March 2007

• ILC, bank guarantee or central public guarantee (unconditional)
• The country ceiling is 1000 mln euro
• Early warning signal 100 mln euro
• - of which was used as at 2012-02-29 14 mln euro

Country class: 6

Albania country facts

Country Report last updated: 30 December 2009     Atradius DSB Economic Research

Country ALBANIA  

Political Situation
Large Political Polarisation

Head of state
President Bamir Topi.

Form of government
Coalition of the centre-right Democratic Party (DPA) and smaller parties, headed by PM Sali Berisha.
 
Internal Economic Situation
Relatively Resilient To Global RECESSION

General situation
The Albanian economy is relatively little affected by the global downturn, partly due to the country’s relative isolation.  Over 2009 economic growth is still forecasted at 2.5%. However Albania’s main trade partners (also for remittances), Greece and Italy are both in deep recession, which has an impact on Albania. The possible EU candiCountry Report last updated status may stimulate foreign investors to invest in Albania’s power sector. According to the Albanian authorities is financially stable and does not need a new IMF SBA.  Albania has a large informal cash economy (also hindering effective monetary policy) but banking intermediation is growing rapidly, even leading to a credit boom in foreign currency. After the sale of the largest state bank, the sector is now mainly foreign-owned and fairly resilient to major hypothetical shocks (stress test). Poor social indicators: low level of education/healthcare and lack of basic needs like water, heating and sanitation. Very poor infrastructure. Improved but still large corruption: 85th out of 180 on TI Index.
 
External Economic Situation
Liquidity/Solvency Figures Do Not REFLECT WEAK EXTERNAL FINANCE
Main sources of foreign exchange
Workers’ remittances, textiles/footwear (48%), minerals.

Main foreign markets
EU (85%), especially Italy (68%) and Greece (8%).

Main expenses of foreign exchange
Machinery (20%), food (18%), fuel (13%).

Balance of payments 
Very large trade deficits are mainly financed by inflows of workers’ remittances (15% GDP), privatisation receipts and by multilateral support. The exchange rate of the lek has depreciated with 10% over 2009.