The economic regression in Italy of the second half of the 2018 has also caused problems for the Albanian economy, which has numerous trade exchanges with the Bel Paese, from which numerous emigrants also come.
A new threat
The Italian regression is a new threat to the Albanian economy, which is already facing internal problems - such as the free fall of the euro, public debt, the increase in public-private partnerships, two large-scale energy investments by way of completion and so on - that have put the whole country under pressure.
Furthermore, the prolonged drought that has damaged the country's hydro-dependent electricity production has forced the authorities to opt for expensive electricity imports, which have certainly not helped the economic framework of the Land of Eagles.
The Italian economy experienced a regression for two consecutive quarters in the second half of the 2018, due to the decline in manufacturing activity and investor confidence, which caused public debt to rise more than the Italian government had expected.
The consequences for Albania
Due to the many commercial exchanges, investment links and remittances, a slowdown in the Italian economy implies more problems for the Albanian economy and its growth prospects.
Some international institutions, such as the World Bank and the International Monetary Fund, expect the Albanian economy to slow down at the 3,5-3,7% after the growth of the 4,2% recorded last year.
However, the Italian economic regression could lead to a new downward forecast, which for this year foresees an increase in 4,3%:
"It has been shown that the stronger the commercial bond between two countries, the greater the positive or negative effect that will result. ”- said the economic expert, Arben Malaj, for the Albanian media.
Furthermore, the former finance minister said that the difficult economic situation in Italy could be prolonged and that, for this reason, the Albanian government will have to be well prepared in managing the possible negative consequences that will affect thousands of Albanian families that depend on remittances coming from Italy.
The apparel and footwear industries (which already had difficulties in facing the free fall of the euro), as well as that of the call centers, should be the first to pay the consequences of a possible constant recession of the Italian economy, given their almost total dependence on the economy of the Bel Paese.
The future of the Albanian economy
Economics expert Besart Kadia argues that the decline in private investment over the past five years and the loss of human capital due to the new wave of migration suggest that Albania's economic growth will be lower in the coming years.
"Such a scenario will result in lower revenues for the state budget and, consequently, further pressures on our economy from public debt and the social security system. "- said Kadia.
A high taxation system compared to the other Balkan countries, the long issue of property titles and an inefficient judicial system, are the main concerns for potential foreign investors in the country, mainly focusing on sectors such as mining, energy hydroelectric and oil industries.
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