Long-term crisis consequences

The newly published economic program for the 2013-2015 period shows that an economic growth of 4% cannot return before 2015, but as the document says, this is a high risks scenario, three of which are carefully analyzed.

The first risk is the failure to recover domestic demand, even when the uncertainties that the crisis brought to citizens will be fewer, and businesses will have a better situation. The balance of consumption and domestic investment in lower levels, according to the Ministry, would create a chain reaction, leading initially to a slower income growth which would show later in new investments, discouraging technology improvements and economic growth.

According to the Ministry, it would not only deteriorate the economic growth for the next three years, but it would also hit the potential economic growth for later periods. The document warns that this low economic growth scenario would make it even more difficult to keep under control the debt and stabilization of public finances.

The second danger is that of the foreign position of economy. Despite the good progress of commerce during 2012, the Ministry experts warn that the commercial balance improvement could change negatively if the energy crisis will impose expensive imports, and the difficult situation in Italy and Greece will damage the Albanian exports. To these risks of real economy is added the one that comes from the financial sector and that is related with the hesitation of banks to accredit economy, due to bad loans and low business demand.

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