Coronavirus hits harshly the Albanian economy



 The coronavirus crisis in Albania has affected almost all sectors of the economy.

The first to be affected are the sectors related to travel, trade and services due to successive government measures to block borders, flights, and movements within the country's territory.

Experts say what is happening now is just the tip of the iceberg and predict pessimistic scenarios for the economy, which is also hit by the devastating November 26 earthquake.

They suggest the government to follow Italy's example and help businesses with relief packages.

The coronavirus crisis in Albania is giving the first negative effects on the economy.

The industries affected directly are the textile industry, processing industry, tourism, trade and services, and the flight sector. The tourism industry has been firstly affected, as its essence is the movement.

Coronavirus hits harshly the Albanian economy

Tourism's contribution to GDP, along with the sectors that depend on it, is 26.2% and has over 291 thousand employees in total and holds a significant share of employment in the country. Industry representatives say the crisis has already hit the door.

“The European partners are canceling all tours because no one in Europe is moving. A group of tourists in a week we take to 7 hotels in 14 restaurants, so there are nearly 20 family businesses, small and large, catering to this movement, from a single mug. If 10 tours are canceled by a single company, that means 200 businesses are damaged. But if there are 10 companies that bring in the same amount of tours, that's 2,000. The negative impact is huge,” says Kliton Gerxhani to VOA, the Representative of the Albanian Turoperators.

Even the tourism expert Auron Tare explains the chain effect of tourism damage because of the spread of the new virus.

“The damage to tourism brings problems in the second scalability if we will describe this in these terms. The catering industry is damaged, agriculture is damaged. It's a chain effect. The number of people, hotels, taxis, guide services, the number of museum entrances are reduced. So it's a whole chain, which gets hit by reducing the number of visitors," Mr. Tare said.

Representatives of the tourism industry, in an official letter to the Ministry of Environment and Tourism, appeal to the following the example of Italy, reviewing some taxes and offering relief in conditions of liquidity shortages.

China and Italy have also been hit hard by the coronavirus crisis as China accounts for 7.4% of total imports and is the country's third trading partner, and imports of machinery and equipment are currently blocked, which, according to INSTAT they were worth over 100m euros in 2019.

While Italy is Albania's largest trading partner in the airline sector and the ban on flights is expected to have severe consequences, experts say.

"Given that 1.7 million passengers travel to Italy every year, which is half the total and if we take a ticket average of 150 euros, the average in Italy, then we are somewhere at 300 million euros which is just the airline industry. This industry is affected. No matter what the damage, no one says it today, because it is not known how long it will continue,” said Ornela Liperi, editor-in-chief of Monitor.

Italy holds a 33% share in trade volume and is Albania's first trading partner. 47% of exports go to Italy and one of the sectors that have begun to experience the first effects of the coronavirus crisis is that it accounts for 64% of exports with Italy. The sector has over 55,000 employees throughout the country.

"Even the textile industry could not be an exception to the global coronavirus crisis. Normally textile companies in Albania have a reserve of 1 to 2 weeks. Closing the borders will bring some difficulties. We have a problem, which is special this year, which is related to the hiring of workers from Pakistan and Bangladesh. They normally had to be in Albania, and because of the coronavirus crisis, they have not arrived yet. We need to stay ready and see how the situation will go," says Florian Zekja, a business representative for the Textile.

Ornela Liperi, a journalist, says the arrival of the coronavirus in Albania will also hit the domestic economy, which is dependent on services and trade. The government's drastic measures to shut down bars, restaurants and halt transportation are projected to significantly reduce domestic consumption.

“We are a micro-economy; 99% of businesses are small, which I believe will have no help to cope with this pressure, because we will keep in mind that customers will not go to local stores, no longer buy clothes in stores. They will buy only the essentials. That is, the sectors that are at the heart of the economy will be affected," she said.
Coronavirus hits harshly the Albanian economy Coronavirus hits harshly the Albanian economy Friday, March 13, 2020 Rating: 5
Loading...
Powered by Blogger.