Albania’s economy grew by 4.32% in the second quarter – Instat figures

High electricity production has driven economic growth for the second consecutive quarter above the 4% level. According to data from the Institute of Statistics (Instat), the Albanian economy grew by 4.32% in the second quarter, after raised by 4.45% in the first quarter of the year.

Electricity branch for the second quarter increased by approximately 67.5% on an annual basis, being the main contributor to growth. This growth, which is outside a normal cycle and owes a profound change in the hydrological conditions compared to the previous year, raises uncertainty about the sustainability of further economic growth over the year.

The processing industry made a high contribution for the second quarter, with about 11.2%. The high trade sector also recorded a significant growth above the average, including transportation, accommodation and food service, which grew by 5.7%.

However, the high growth in these sectors, balanced the sharp decline in two important sectors, telecommunications and construction. Information and communications services declined 5.8% year-on-year, confirming the difficult moment of these markets.

Meanwhile, construction declined by 2%, but partly due to the comparative base of the second quarter of 2017, which coincided with the general elections. In the growth analysis according to the expenditure method, Instat data show a significant slowdown in the investment contribution.

Gross fixed capital formation grew by only 1.5%, far from the two-digit levels of previous years. However, positive growth has been the improvement of private consumption, which increased by 3.35% on a yearly basis in the second quarter. Forecasts put Albania’s economic growth this year at 4%.

For the first half of the year, this prediction has been exceeded, thanks to the super-production of electricity. For the rest of the year, it will be very difficult to maintain these rates, given the very high contribution that the energy branch has provided.

SCAN

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