Albania Country Report - November, 2016

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Albania Country Report - November, 2016

This report covers the key macroeconomic and financial releases as well as the political events from Albania for the period of November 12, 2016 – December 13, 2016.

Albanian bribery rate among highest in SEE
Albania warship joins Nato operation in Aegean Sea
Albanian president sets June 18 as election date
Novomatic completes acquisition of Albanian National Lottery
EU welcomes Venice Commission opinion on Albania’s vetting law
Moody’s says Albanian's high government debt remains key challenge



Key points:
• Albania’s inflation speeds up in November
• Albanian households spend half of their budget on food, survey shows
• 10-mo trade gap widens 16.3% y/y
• Passenger traffic at Tirana airport up 8% in 2016
• Lending in Albania rises 0.5% y/y in October
• Albania's NPL ratio up to 21.35% at end-October
• Growth of Albania’s gross external debt slows to 6.5% y/y at end Q3
• Albania’s 9-mo FDI down 3% y/y




Table of Contents

1. Executive Summary 4
1. Politics 5
EU welcomes Venice Commission opinion on Albania’s vetting law 5
Albania proposes amnesty for handing over illegal guns 5
OSCE helps Albania to destroy toxic chemicals 6
Albanian president sets June 18 as election date 6
Albania warship joins Nato operation in Aegean Sea 7
Albania to spend €170mn on justice reforms in next few years 7
Albania organises first diaspora summit to strengthen national identity 7
Albania launches campaign to collect illegal weapons 8
Albania’s bribery rate among highest in SEE region, suggests TI survey 8
Bosnia, Albania and Macedonia among top 9 countries with highest emigration level 9
2. Macroeconomic overview 9
Moody’s says Albanian's high government debt remains key challenge 9
73.3% of Albanians are poor, Credit Swiss report shows 10
Albania falls in Global Entrepreneurship Index 2017 10
4. Real Sector 10
4.1. GDP 10
Albanian economy expands by real 2.59% in 2015 – preliminary data 10
4.2 Inflation 11
Albania's inflation speeds up in November 11
Albanian households spend half of their budget on food, survey shows 12
4.2.2 Producer price index 12
Albania's producer price deflation eases to 2% y/y in Q2 12
4.3 Industry and trade 13
4.3.1 Enterprise statistics 13
Number of active enterprises up 22.7% in Albania in 2015 13
4.3.2 Construction 13
Albania's construction cost index ticks up 0.1% y/y in Q3 13
4.4 Investments 13
Albania’s negative NIIP expands 6.2% in second quarter 13
4.5. Labour and retail 14
4.5.1 Unemployment and wages 14
Albania's jobless rate falls to 14.7% in Q3, labour force survey shows 14
4.5.2 Retail 14
Albania's retail sales growth accelerates to 6.2% y/y in Q2 2016 14
5. External sector and trade 15
5.1 Balance of payment and current account 15
Albania's Q3 current account gap falls 33.5% y/y 15
5.2 Trade 16
Albania’s 10-mo trade gap widens 16.3% y/y 16
Albania’s IPI down 1.6% y/y in Q3 16
5.3 Foreign direct investments (FDI) 17
Albania’s 9-mo FDI down 3% y/y 17
5.4 External debt 17
Growth of Albania’s gross external debt slows to 6.5% y/y at end Q3 17
5.5 Foreign reserves 18
Albania’s reserve assets up 1.9% y/y at end-October 18
6. Public sector 18
6.1 Budget 18
Albania posts budget surplus through October 19
6.2 Government debt 20
Albania’s public debt reaches €7.84bn at end-September 20
7. Foreign exchange 21
Albanian lek down again against euro in November 21
8. Financial sector and capital markets 21
8.1 Banking system 21
Interest rates on Albania's lek loans grow further in October 21
Lending in Albania rises 0.5% y/y in October 22
Albania's NPL ratio up to 21.35% at end-October 23
8.2 Interest rate and bond market 23
Albania sells €621mn in T-bonds this year 24
8.3 Money supply 24
Albania's M3 money supply up 2.6% y/y in October 24
8.4 Credit rating 24
S&P rates Albania at 'B+/B' 24
9. Industry and sector news 25
Call centers in Albania won’t be closed, Italian ambassador says 25
Albania and Hungary open way for Wizz Air to launch flights to Tirana 25
Albanian microfinance institution Fondi BESA joins Agribusiness Support Facility 26
Passenger traffic at Tirana airport up 8% in 2016 26
New Italian bill puts call centres in Albania at risk 26
Growth of Albanian insurance market speeds up through October 27
Serbian-Albanian joint chamber of commerce opens in Tirana 28
World Bank provides mn for urban and tourism development project in Albania 29
10. Major Corporate News 29
Germany’s Nexans autoelectric to open cabling system plant in Albania 29
Novomatic completes acquisition of Albanian National Lottery 30
Albania’s OSHEE net profit falls 21% in January-September 30
TAP project expected to inject €1.5bn in Albanian economy in next six years 31

Number of pages: 31
Release Date: Tue, 13 Dec 2016