Albanians had more confidence on their economy after the elections

Albanians had more confidence on the economy of their country during the third quarter of this year compared to before. This period, in fact, coincides with the period after the general elections of 25 June 2017. This shows that the country not only managed to normalize macro-economic indicators, but also the confidence that businesses and individuals have on the economy.

Such phenomenon was pointed out by the Bank of Albania on its Report of Business and Consumer Confidence for the third quarter of this year. According to this report:  “The index of economic sensitivity registered a 1.8% growth compared to its long-term average and the value registered in the same quarter a year ago”, the Central Bank says.

Meanwhile, the Bank also adds that the growth reflected an improvement of confidence by the sector of commerce and construction. Consumer confidence on the economy also registered a growth.

“Meanwhile, confidence of the service and industry sectors were slightly lower compared to the previous quarter”, experts of the Bank of Albania clarify. On the other hand, they also admit the fact that consumer confidence has grown too, as if to strengthen the idea that after the June election, the country went through a quiet financial situation. “Consumer confidence index continued to grow during the third quarter of this year, by 1.3%, standing at around 4.5% over its historical average”, experts of the Bank of Albania say, arguing that this is shown by the considerable purchases and expenses that consumers have realized after June.

 Construction recovers helped by  the increasing numbers of permits

Construction is one of the key sectors of the country’s economy and this sector has displayed more confidence than other sectors following June 25. “The confidence of the construction sector in the economy continued to rise for the third quarter in a row, reaching a level of 7.2% during the third quarter”, experts of the Central Bank say, adding that the confidence that this sector has on the economy is on the way of reaching historical average level of 8.5%. According to experts, such thing is explained by the growing number of construction permits that local government authorities have issued in the first half of the year, especially for the urban and industrial part of the country, from Durres to Tirana. This has led to an increase of the number of contracts by 4.4% during the summer. This has been naturally accompanied by a growth of the construction activity by 10% after the elections.

 Forecast, consumers: Better times are coming

 “Better times are coming…”. This is what consumers are saying, at least according to the Bank of Albania in regards to their personal financial situation in the months to come. Asked about their financial situation, they say that their household finances will improve by 12%. But they cannot confirm the same thing in regards to their current situation. Meanwhile, they also offer a negative picture in terms of their savings, with a drop of 40%. But when it comes to unemployment or prices and the way they will progress in the months to come, they are more optimistic, saying that these two indicators will further decline.

Industry at a standstill, it cannot boost contracts and production

The country’s industry sector seems to have been at a standstill during the months of this year. The positive climate which has associated the business sector after the elections, doesn’t seem to have had a positive impact on it. Meanwhile, it looks as if this sector has even manifested a decline of confidence on the economy. “Confidence of the industry sector on the economy marked a slight decline by 1% during the third quarter of this year”, experts of the Bank of Albania say, arguing that such drop has been caused by a decline of the level of production in this sector by 0.4%. “Meanwhile, the number of contracts remained at the same level as the previous quarter”, they further explain.

Services and commerce have seen better days

Services and commerce are two other sectors which have seen better days, despite a positive business climate that has been noticed after June 25. Thus, experts of the Bank of Albania say that confidence of the service sector in the economy continued to fall during this period by 2.2%. They explain such fall with a decline in the service sector in general, but at the same time, with the low demand that people have for services. A decline of confidence on the economy has also been seen in the commercial sector, but not at the same level as the service sector. “Projection on employment and expectations on commerce registered a fall”, the Bank of Albania also explains.