Experts in Albania say the COVID-19 crisis endangers the economy

 The government will support $ 370 million in businesses to protect them from bankruptcy. But economic experts told DW that this is insufficient and aid needs to be increased.

Every day new cases of infection with COVID-19 are identified. On Friday, (20.02.2020) the number of people affected by COVID-19 increased 35 times compared to 11 days ago when there were only two cases. Official sources from the Institute of Public Health of Albania told to DW that the number reached 70 and those tested 732.

Tirana is the most affected city with 50 people infected, followed by Fier with 7 cases, Durres with 5 and Lushnja, Elbasan and Rrogozhina with 2. But the death toll remains only 2 elderly women, with travel histories in Italy. In the coming days, authorities are predicting many new cases.

Prime Minister Edi Rama has further strengthened the measures of protection and self-isolation of citizens. On the streets of Albania, the army and police have come out to punish anyone who breaks the rule: coming out of self-isolation at home only 4 hours in the morning and 4 hours in the afternoon, unaccompanied by no one. Free circulation will be prohibited from Saturday (21.03) after 1:00 pm. Only pharmacies, supermarkets, bakeries and fruit and vegetable shops are open. The economic losses of small and medium-sized businesses, services, trade, and manufacturing are huge.

The government guarantees $ 370 million.

To protect the business from bankruptcy and alleviate the crisis from COVID-19, the government adopted a financial measures plan that took effect on Friday (20.03).

In an official statement, Prime Minister Rama announced that the government made $ 370 million available. Of this amount, 25 million are for health, to cope with the expected increase in the number of infected; 100 million for companies that cannot pay their employees; 65 million for the needy and those who cannot work due to the self-isolation order. The plan of financial measures of $ 370 million includes the settlement of interest - delays for payment of electricity bills with $ 150 million, of which 211,024 families benefit, the prime minister emphasized.

The plan also includes halving the monthly salaries of ministers and MPs for the duration of the COVID-19 crisis.

Economic experts: Positive step, but not enough

Dr. Selami Xhepa, a prominent economic expert in Albania, told DW that the government's financial support "is an important step in addressing a serious problem related to the paralysis of the country's economic life due to the coronavirus crisis. But financial support should have been stronger and more ambitious, 500m euros, as a strong stimulus to prevent economic downturns, but I hope the government to react to the development of the situation,” expert Selami Xhepa says.

Dr. Zef Preҫi, director of the Institute of Economic Studies, tells DW that the government's financial support is in line with what all governments are doing in countries affected by the deadly virus. "It is a necessary step, in the right direction, to try to reduce the multidimensional negative impacts of the pandemic crisis. But insufficient. The amount offered to enterprises and the most vulnerable stratum of society is small and below the real capacity of the state budget and the national economy as a whole,” Zef Preҫi said..

His argument is that the low percentage of $ 370 million accounts for only 1.5% of Albania's Gross Domestic Product. “The German, French and US governments have made equal funding of 14%, 11% and 7% of their country's GDP, while Albania has only 1.5%. The $ 370 million in financial support is far from the pressing needs of most affected sectors by the crisis, such as the textile industry, services, and tourism. It is being undertaken without revising the 2020 state budget and leaving the country's banking and a legal system out of engagement.”

The prolongation of the pandemic and the economic crisis

The threat of crisis and economic downturn remains high. Selami Xhepa tells DW that "there is a high likelihood of the country going into economic recession." "If the closure of the country continues until June there is a risk that the country will fall into a recession, marking negative economic growth for the first two quarters of this year," he said.

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Experts in Albania say the COVID-19 crisis endangers the economy Experts in Albania say the COVID-19 crisis endangers the economy Saturday, March 21, 2020 Rating: 5
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