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Progress EC report for Albania/ Informal economy problem. Criticism of the budget change with the Normative Act

2024-10-31 09:50:06Biznes SHKRUAR NGA REDAKSIA VOX

Progress EC report for Albania/ Informal economy problem. Criticism of the

The European Commission has published a progress report for Albania, on the progress of reforms, documenting and analyzing the progress achieved in certain areas for each chapter. As for the economic part, according to the document, Albania's economy recorded strong and relatively broad-based growth. "After contracting in 2020 and rebounding strongly in 2021 and 2022, with growth rates of 8.9% and 4.9% respectively, economic expansion slowed but remained strong at 3.4% in 2023," the document says.

Likewise, fiscal consolidation continued in 2023, with a narrowing budget deficit, a positive primary balance and a public debt ratio that continued to decline. However, the report criticizes the changes that were made to the budget throughout the year. "In December 2023, the Assembly approved the 2024 budget. However, in February and then in August 2024, the Council of Ministers approved a Normative Act on amending the budget, which contradicts the commitment to use the regular legislative process for amendments budget", says the progess report.

Also, the European Commission's business climate is hindered by a large informal economy. "The informal economy remains widespread, affecting fair competition between businesses. INSTAT estimates that informal employment occupies 29.4% of total employment, not including the agricultural sector", the document states, adding that the lack of efficiency in the public administration, an excessive regulatory framework and corruption present further challenges for the business climate. "Corruption continues to present challenges for businesses, although the history of investigating and prosecuting high-level corruption has improved slightly," it added, citing the lack of labor as a challenge for businesses.

Meanwhile, according to the report, progress has been made in the management of public investments and the management of public finances. Likewise, macroeconomic policies are assessed as appropriate, supporting macroeconomic stability and growth. "Macroeconomic policies were effective in significantly reducing inflation while maintaining strong economic growth," the report states.

As for the quality of infrastructure, the increase in investments and some progress in infrastructure projects are appreciated. "Albania increased its efforts to make progress in road construction, especially in tourist areas, and in railway infrastructure projects, aiming to improve interregional connectivity and trade infrastructure," the report assesses.

 

 


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