Download 18-5-2012_Altin_Tanku

Albanian Economy in the
Global Economic Background
Altin Tanku
May 18th 2012
Overview
• Current Developments
– Taking stock of current global developments
• Economy
• Financial system
• Future in a Global World
– Own Model of growth
– The role of Partners
Catching up at any speed
18000
40000
16000
35000
14000
30000
12000
25000
GDP per Capita
10000
20000
8000
15000
6000
10000
4000
5000
2000
0
0
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Albania
Bosnia and Herzegovina
Bulgaria
China
Croatia
Hungary
Kosovo
M acedonia, FYR
M ontenegro
Romania
Russian Federation
Serbia
Poland
European Union
Source World Bank & UNCTAD
Inflation
6.0
5.0
4.0
3.0
2.0
1.0
0.0
inflation
10th percentile
25th
75
90th
Foreign price developments the most likely determinant of inflation
GDP Growth
16
14
12
10
8
6
4
2
0
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
•Growth depends on consumption, investments and recently exports.
•Investment depend on government exp. and credit to private sector.
2011
GDP sectors
60
50
40
30
20
10
0
1996
1997
1998
Services
1999
2000
2001
2002
Construction
2003
2004
Industry
2005
2006
2007
2008
2009* 2010**
Agriculture, hunting
and forestry
Dynamic Economic Forecasts
12
11
10
9
Real GDP Growth ( y-o-y)
8
7
6
Instat 2011Q2
September 2011
5
December 2011
4
3
2
1
0
-1
-2
February 2012
Policy & Market Interest Rates
10%
16%
15%
14%
8%
13%
12%
6%
11%
10%
9%
4%
8%
7%
deposit 12 month rate
Repo
tribor 1wk
interbank rate
Bono 12M
Dec-11
Aug-11
Apr-11
Dec-10
Aug-10
Apr-10
Dec-09
Aug-09
Apr-09
Dec-08
Aug-08
Apr-08
Dec-07
Aug-07
Apr-07
Dec-06
Aug-06
Apr-06
Dec-05
Aug-05
6%
Apr-05
2%
credit 12 month rate
Policy is constrained by the presence of output gap and low GDP and
low inflation (no strong demand yet in horizon)
Fiscal Developments
40.00
35.00
30.00
25.00
20.00
15.00
10.00
5.00
-5.00
-10.00
-15.00
1999
2000
2001
2002
2003
Fiscal Balance
2004
2005
Total Revenues
2006
2007
2008
2009
2010
Total Expenditures
Fiscal stance is stretched as much as it can, there is less or no
room for further fiscal expansion.
2011
Foreign Trade Developments
6.0
40%
5.0
35%
4.0
30%
mio EUR
3.0
25%
2.0
1.0
20%
0.0
15%
-1.0
10%
-2.0
5%
-3.0
-4.0
0%
2000
2001
Export of goods
2002
2003
Import of goods
2004
2005
Trade balance
2006
2007
Trade volume
2008
2009
2010
2011
The percentage of coverage (right axis)
Export growth during 2010-2011 represent mainly exports of energy.
Current Account
Current Acc. Deficit
18
Remittances
15.6
16
14
13.1
12.2
13.1
15.1
12.2
10.5
10
9.4
9.0
8.9
7.6
8
6.8
6.6
6
5.8
4
2
J-S 2011
2010
2009
2008
2007
2006
2005
0
2004
percent of GDP
11.8
11.5
12
The other “Export”
EU Remittances Oflow
80
70
60
50
40
30
20
10
0
2005
2006
2007
Germany
Greece
2008
2009
Italy
Remitances in perspective
60
50
40
30
20
10
0
2000
2001
2002
2003
2004
Remittances % of Exp.
Source EUROSTAT & UNCTAD
2005
2006
2007
2008
Remittances % of GDP
2009
Foreign Direct Investments
45.0
40.0
ROW
35.0
Greece
Italy
30.0
Austria
25.0
Germany
20.0
Turkey
15.0
Canada
10.0
5.0
0.0
2007
2008
2009
2010
Exports
25.0
80.0
70.0
20.0
60.0
50.0
15.0
Greece
Germany
40.0
Spain
Turkey
10.0
30.0
China
Italy
20.0
5.0
10.0
0.0
0.0
11222
9…
9…
0…
0…
0…
Imports
35.0
60.0
30.0
50.0
25.0
40.0
Greece
20.0
Germany
30.0
15.0
Turkey
China
20.0
10.0
10.0
5.0
0.0
0.0
1993199419951996199719981999200020012002200320042005200620072008200920102011
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
Italy
Free floating exchange rates
150.0
Albanian Lek per Foreign Currency
140.0
130.0
120.0
110.0
100.0
90.0
80.0
70.0
2000
2001
2002
2003
LEKUSD
2004
2005
LEKEUR
2006
NEER
2007
2008
REER
2009
2010
2011
Banking System
Dec-08
No. of Banks
16
No. of banks branches
511
Assets/GDP (%)
76.7
Credit/GDP (%)
36.5
Share of foreign capital (%) 91.8
Capital Adequacy Ratio (%) 17.2
ROA (%)
0.91
ROE (%)
11.35
Net Interest Margin (%)
4.13
Liquid Assets/Total assets (%) 42.8
Dec-09
16
524
77.5
39.3
92.3
16.2
0.42
4.58
4.04
26.6*
Dec-10
16
529
81.0
40.1
92.5
15.4
0.72
7.58
4.32
25.9*
Dec-11
16
528
84.8
42.8
N/A
15.6
0.07
0.76
4.20
26.5*
* Note: The methodology of calculating Liquid Assets has changed in December 2009
Jan-08
Feb-08
Mar-08
Apr-08
May-08
Jun-08
Jul-08
Aug-08
Sep-08
Oct-08
Nov-08
Dec-08
Jan-09
Feb-09
Mar-09
Apr-09
May-09
Jun-09
Jul-09
Aug-09
Sep-09
Oct-09
Nov-09
Dec-09
Jan-10
Feb-10
Mar-10
Apr-10
May-10
Jun-10
Jul-10
Aug-10
Sep-10
Oct-10
Nov-10
Dec-10
Jan-11
Feb-11
Mar-11
Apr-11
May-11
Jun-11
Jul-11
Aug-11
Sep-11
Oct-11
Nov-11
Dec-11
Financial Intermediation
55%
45%
35%
25%
15%
5%
-5%
Deposit growth (y-o-y)
Sources of Financial Intermediation
Dec-11
Sep-11
Jun-11
Mar-11
Dec-10
Sep-10
Jun-10
Mar-10
Dec-09
Sep-09
Jun-09
Mar-09
Dec-08
Sep-08
Jun-08
Mar-08
Dec-07
Sep-07
Jun-07
Mar-07
Dec-06
Sep-06
Jun-06
Mar-06
Dec-05
Non Performing Loans
20.00
18.00
16.00
14.00
12.00
10.00
8.00
6.00
4.00
2.00
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Albania-EU-Global Economy
• Albania model of growth
– Internal Market Factors
• Factor redistribution
» early transition period
• Absorption lead model
» period leading to the crisis
– Export lead strategies
•
•
•
•
•
Cheap labor?
Lots of FDI exclusively from EU?
“Close” partners in geography and other dimensions?
New relatively large markets?
Moving up the value chain?
Global trends & Theory of International Trade
“Over the past three decades hundred of
millions of workers have entered the global
economy… and over time they have
generally gained in terms of human capital
and in terms of value added and income. …
but these new workers have brought more
employment competition and significant shifts
in relative wages and prices, which is having
profound distributional effects.”
Spence, M., 2011
Albania-EU-Global Economy
• One global market, one global factor, one
global price.
• Deal with it …but how …
• Challenge: remain part of the global market.
– Reduce dependence on single traditional partners
– Hope that the anchor is still there
– Define relevance of the SEE term
• Must know for the future
• Understand the nature and value of wealth
• It is all part of an endogenous system
• There is potential for regime change
Global Economy & Albania
– The wealthiest “nation” is the “leading anchor”
– What will define wealth in the next 50 years
– Potential for growth
» minerals, agriculture, trade related services and infrastructure
– It is all part of an endogenous system
– EU developments can not go unnoticed in the global economy.
– Global developments can not be treated as exogenous and unrelated
with developments of Albania and/or its main partner.
– There is potential for regime change
– Literature on the negative effects of globalization is growing in size and
topics.
– Globalization or technological change or both have constrained driving
forces of the system opening gaps that might tiger error correcting
mechanisms.
» Structural breaks vs. temporary drifting
» Where is the error correcting mechanism located in the system.