July 1, 2019 / 2:47 PM / 3 months ago

Albanian GDP expands 2.21 pct in Q1 of 2019

TIRANA, July 1 (Reuters) - Albania’s gross domestic product expanded by 2.21 percent in the first quarter of 2019 over the same period last year, helped by trade, transport, accommodation, food services, real estate and construction, the statistics office said on Monday.

The group of industry, energy and water - the main driver of 2018 annual growth of 4.06 percent thanks to electricity output - shrank 0.81 percent in the first quarter.

Heavy rain helped hydro plants produce more electricity for export over the first three quarters of last year.

Compared to the previous quarter, GDP grew by 0.56 percent in the first three months of 2019, the Statistics Institute said, pushed up by trade, transport, accommodation and food services, construction and fishing.

But industry, energy and water shrank by 8.23 percent.

Growth in the first quarter is about half the rate of 4.3 percent Albania optimistically expects to achieve annually in 2019. The International Monetary Fund forecasts 3.7 percent.

Reacting to the lower-than-hoped growth figure, the Finance Ministry said “the positive changes in the second quarter in the energy sector are expected to normalize the (energy sector’s) annual contribution to growth, which is expected to meet forecasts”. Rain showers have been plentiful in spring.

Shutting down betting operations had also impacted growth in the first quarter of 2019, it added, but its social benefits will over the long term bring more economic gains.

However, it said a possible slowdown of the economy in Europe and Albania’s own political strife could be “negatively influencing economic growth”. The opposition has been protesting regularly since February asking for snap elections.

“Each political tension or any kind of tension is bound to have effects on the economy, and its impact cannot be avoided, especially if it persists and escalates,” it added. (Reporting by Benet Koleka; Editing by Andrew Cawthorne)

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