The political climate has adversely affected confidence in the economy
Business and consumers surveyed by the Bank during the first three months of this year have expressed pessimistic about the economic developments in the country, more than at the end of last year. The prime reason, according to the Bank, have been developments in domestic politics. Bank of Albania published yesterday perception Economic Index (ton), which fell by 7.3 percentage points in the first quarter of 2011. The Bank explains that the current level of the indicator is 14.7 percentage points below its long-term average. The central bank in its evaluation of this survey disclosed that deterioration resulted from the collapse of confidence in the services sector and deteriorating consumer confidence.
Industry Sector
Confidence indicator in industry (TBI) rose by 2.8 percentage points in the first quarter of 2011, following growth recorded in the previous quarter. The improvement is mainly caused by estimation of the situation of increasing industrial production. Industry sector businesses have praised the increasing performance of the economy in total and the overall state of their businesses for the first quarter of 2011. In general, all factors that limit the business activity of the industry have had a lower impact compared with the fourth quarter of 2010. Especially the situation of public order and safety, legal and institutional framework and relationships with banks and the financial sector, have reduced the negative impact on business activity of the industry. “The presence of corruption and informal economy” is valued by businesses as the main factor that has hampered their normal activity in this quarter, according to the Bank of Albania. Industry sector businesses have praised the growing domestic demand and foreign industrial products. Industry businesses reported following the upward trend in prices of their production in the first quarter of 2011. This upward trend has been observed that in the first quarter of 2009. About 85.6% of businesses. This sector feel that the current level of production capacity is sufficient, given the level of commissioning contracts, which have recorded a slight decline.
Construction Sector
Contrary to what happened in the past, Confidence Indicator in Construction (TBN) rose by 3.4 percentage points in the first quarter of 2011. Considered that the Bank of Albania. In the first quarter of 2011, construction businesses have increased their appreciation for the general economic situation and for the overall state of their business. Increased optimism and construction businesses was caused by less negative impact of problems related to infrastructure, relationships with banks and financial sector, as well as legal and institutional framework. Domestic political climate is one of the factors evaluated in a higher degree of business industry, a factor that inhibits their normal activity. Despite the most optimistic assessment of the situation of production, construction businesses have reported that the capacity utilization rate of construction, in the first quarter of 2011, is 61.0%, about 6.6 percentage points below the long-term average. This rate, falling by 2.5 percentage points from the fourth quarter of 2010, constitutes the lowest level of capacity utilization compared with other sectors of the economy. Construction output prices are estimated to increase in the first quarter of 2011, following growth recorded for the previous two quarters. Construction status of inventories, in the first quarter of 2011, is estimated to decrease. Also, the financial situation has improved business in the first quarter of 2011, based on the opinions and construction businesses. The balance of new investments, made during the past year, increased by 22.0 percentage points, standing in line with historical average.
Service Sector
In the first quarter of 2011 Confidence Indicator in Services (TBSH) fell by 8.6 points. Percentage. In contrast to the estimates of business on aspects related to their activity, the general economic situation in the country is estimated at improvement. Domestic political climate, the state of order and security in the country are assessed at a higher level as factors that hinder the normal development of service sector activity in the first quarter of 2011. “Relations with banks” was the only factor that has registered improvement in this quarter. Demand in service sector is estimated to decline in the first quarter of 2011. Appropriate balance decreased by 7.7 percentage points. The rate of capacity utilization 5, during the first quarter of 2011, resulted in 69.8% level, about 2.3 percentage points lower compared with the previous quarter and about 5.7 percentage points below the long-term average.
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