Albania: A Country on the Move - 18 January

Transcription

1. ALBANIA A COUNTRY ON THE MOVE Gent SEJKO Governor Bank of Albania 1
2. ALBANIA A COUNTRY ON THE MOVE Gent SEJKO Governor Bank of Albania 2
3. Motivation Albania is one of the fastest growing economies in the region GDP Index (2001=100) • One of the highest cumulative growth rates in the region • A history of stable growth, with no major recession episodes * Kosovo series starts from 2006 • Solid fundamentals, supported by stability-oriented macroeconomic policies 3
4. Motivation Business and investment climate has improved rapidly • Substantial improvement in the World Bank - Doing Business Report indicators • Catching up fast with best performers in the region World Bank, Doing Business Report – 2017 (overall ranking) • Ambitious reform agenda to modernise and liberalise further the economy 4
5. Motivation Albania is a middle income country … … about to take the next major step in its growth strategy. Our growth potential and development strategy offer attractive prospects to foreign investors. 5
6. Content 1 . The economy of Albania – An overview 2. Our growth policies and reform agenda 3. Albania as an investment destination 4. Annex 6
7. 1 . The Economy of Albania – An overview A sustainable growth model: Increased reliance on exports, combined with high investment rates • Exports are a major driver of economic growth • High public and private sector investment • Comparatively low tax rates and low public sector consumption Per cent of GDP 7
8. 1 . The Economy of Albania – An overview A sustainable growth model: Moving towards higher value-added and export-oriented industries • Expanding share of industry • Diversifying fast into high value-added services • Re-positioning away from construction, after 2008 Per cent of GDP 8
9. 1 . The Economy of Albania – An overview A young population with favorable mid to long term demographics • Average age, around 35 years • 20% of population under 14 years of age • 67% enrolment rate in tertiary education 9
10. 1 . The Economy of Albania – An overview A stable monetary environment, with low inflation and interest rates, stable currency and low FX market volatility Euro vs Local Currency Index (2002=100) • BoA applies an inflation targeting regime, with a 3% inflation target, and a flexible exchange rate • Average inflation rate 2.5%, over the past decade, with low volatility • A liberalized current and capital account… • …combined with one of the most stable currencies in Eastern Europe. 10
11. 1 . The Economy of Albania – An overview The financial system is a solid pillar of our economy • No stress episodes at systemic level or at major individual institution level • Bank-based financial system: • Banks adequately capitalized, profitable and liquid • Little exposure to external financing • Well-supervised and regulated by the Bank of Albania • Fully-developed system of financial safety nets 11
12. 1 . The Economy of Albania – An overview Large and uninterrupted FDI inflows • Current account deficits reflect high investment activity • FDIs finance most of these deficits • Large FDI inflows in: - IT and communications; - finance and insurance; - manufacturing; and - mining. 12
13. Content 1 . The economy of Albania – An overview 2. Our growth policies and reform agenda 3. Albania as an investment destination 4. Annex 13
14. 2 . Our Growth Policies and Reform Agenda Albania will remain a market-driven economy, based on private initiative; however, public authorities are committed to an active role in: • Long-term sustainability, anchored in stability-oriented macroeconomic policies: • Financial system: Monetary policy aimed at price stability, prudent supervision and regulation of banks • Fiscal health: fiscal policy anchored on a fiscal rule, structural reforms have reduced fiscal vulnerabilities • External anchors: EU integration and IMF oversight and monitoring offer additional guarantees • Long-term growth promotion, realized through comprehensive structural reforms aimed to raise the growth potential: • Qualitative improvements of our labor force • Productivity gains, based on transfer of technology and skills • Ever-improving business and investment climate, based on judicial system, public sector and tax administration reforms 14
15. Content 1 . The economy of Albania – An overview 2. Our growth policies and reform agenda 3. Albania as an investment destination 4. Annex 15
16. 3 . Albania as an investment destination Albania offers attractive prospects to foreign investors, based on: • Optimal geographic position with free access to regional and EU markets • Long-term political, legal and economic stability, anchored in the EU integration process • Price and wage competitiveness and an efficient and productive work force • Low and transparent taxation • Untapped resources in many sectors of the economy • A financial system that offers: • Low financing costs, thanks to a stable financial environment • Ample liquidity, capable to support financing needs • Potentials for new players in the market 16
17. Thank You for Your Attention ! 17
18. 4 . Annex – GDP per Capita Economic growth has improved the standards of living • GDP per capita has doubled over the last decade (in PPP terms) • Albania still lags best regional performers • Large scope for further growth and for fast convergence 18
19. 4 . Annex – Export Structure A diversified export structure • Large share of manufacturing in export content • Growing importance of agriculture and food processing industries • Albania is rich in natural resources 19
20. 4 . Annex – Banking Structure EU vs non-EU Large presence of EU banks, but not only… • Presence of EU banks helps bridge direct connections with the EU market • Other large extra-EU banks ensure a larger accessible market east of the EU 20
21. 4 . Annex – FDI Structure Diversified FDI structure in dynamic sectors of the economy • Industry and services attract an equal share of foreign investment • FDIs go to the most dynamic sectors of the economy, with highly trained workforce • Most FDIs come from advanced and other large emerging economies 21
22. 4 . Annex – Assets and Deposits to GDP An expanding and active banking system • Crucial role of banks in fostering economic growth • Large scope for further expansion of the banking sector 22
23. 4 . Annex – Financial System Indicators The financial system is a solid pillar of our economy % of total Banks Capital assets Numb Branch Foreig Domes Foreig Domes er es n tic n tic 16 500 13 3 82.5 Foreign Banks Origin AUT (1), GRE (3), FRA 17.5 (1), ITA (2), GER(1), BUL (1), Other (4) 2006 ROE 20.2 Capital adequacy ratio (%) 18.1 Liquid assets/short-term liabilities 69.5 2007 20.7 17.1 74.0 2008 11.4 17.2 64.9 Banking Sector Indicators 2009 2010 2011 2012 2013 4.6 7.6 0.8 3.8 6.4 16.2 15.4 15.6 16.2 18.0 32.6 30.6 33.1 36.7 34.7 2014 11.0 17.5 40.4 2015 13.2 16.0 41.4 2016 6.1 15.6 39.5 23