Tourism “myth” fades as BoA states that its real contribution to GDP was low

The deficit of the Albanian economy in goods and services increased by 6.5% in the third quarter of last year.

The Bank of Albania estimates that the growth of the deficit in real terms has been one of the factors that led to the slowdown of economic growth in the third quarter of 2017.

The increase in revenues from tourism and the export of other services, in fact, did not give the expected contribution to economic growth, due to the inflationary effect.

The high level of export deflators, in both goods and services, has led to real growth of exports to be lower than the nominal one.

The opposite is true of imports, where deflators have been in negative values, making real imports to be higher than those at nominal value.

Deflator represents the ratio between real output, measured at baseline prices, versus nominal output, measured at current market prices.

According to data from the balance of payments, in the third quarter of 2017 the Albanian economy’s income from tourism was about 588 million euros, up by 13% compared to the same period of the previous year.

But according to the Central Bank’s analysis, this growth has come to a large extent from rising prices and does not fully reflect the sector’s growth, which in real terms was lower.

Based on the number of visitors, foreign visitors’ tourism for the last year increased by about 8%.

But real economic indicators show that this sector has contributed to the country’s economy less than thought.

SCAN

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