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Albania Monthly Report - February, 2016

Albania Monthly Report - February, 2016

This report covers the key macroeconomic and financial releases as well as the political events from Albania for the period of February 11, 2016 – March 10, 2016.
Albanian PM replaces finance minister Cani
IMF approves new tranche of €72.4mn for Albania under EFF
IMF mission to visit Albania on March 9-22
EBRD president urges investors to consider Western Balkans
Bankers Petroleum drops arbitration against Albania
TransAtlantic Petroleum completes sale of Albanian oil assets to GBC Oil Company
Albania told to drop extradition proceedings against Leyton Orient owner
EU official urges for judicial reforms in Albania as way for opening EU negotiations
Albania warns migrants wait to enter country across border with Greece

Key points:
CPI inflation slows to 0.2% in Feb, PPI prices down 2.3% y/y in Q4
NPL ratio falls to 17.7% at end-2015
Albania's commercial bank loan portfolio down 2.7% y/y at end-January
Albania’s trade gap widens 5% y/y in January
Albania’s public debt up 6.6% y/y in 2015
Albanian govt budget surplus jumps in January, revenues 0.4% above plan
Tirana house price index down 4.8% y/y in Q4
Albania’s population down 0.2% y/y to 2.886mn in 2015


EXECUTIVE SUMMARY 4
MACROECONOMIC OVERVIEW 5
IMF mission to visit Albania on March 9-22 5
IMF approves new tranche of €72.4mn for Albania under EFF 5
REAL SECTOR 6
1. Inflation 6
Albania's CPI inflation slows to 0.2% y/y in February 6
Albania's producer prices down 2.3% y/y in Q4 7
2. Construction 8
Tirana house price index down 4.8% y/y in Q4 8
Albania's construction cost index flattens y/y in Q4 9
3. Population 9
Albania’s population down 0.2% y/y to 2.886mn in 2015 9
FISCAL SECTOR 10
Albania sells out €103.5mn in one-year, six-month T-bills, yields down 10
Albanian govt budget surplus jumps in January, revenues 0.4% above plan 10
Albania sells out €66.6mn in one-year T-bills, yields down 11
Albania sells €21.8mn in two-year T-bonds 11
FINANCIAL INTERMEDIATION 12
EBRD mulls up to €5mn loan to Albanian microfinance institution NOA 12
Albanian central bank governor urges banks to offer more loans 12
Albania's NPL ratio falls to 17.7% at end-2015 13
Albanian banks' net profit soars 40% y/y at end-December 2015 13
Albania's avg interest rate on lek deposits down 0.19pp y/y to 1.32% in January 14
Albania's avg interest rate on new lek loans down 0.12pp y/y to 7.98% in January 14
Albania's M3 money supply up 2% y/y at end-January 14
Albania's commercial bank loan portfolio down 2.7% y/y at end-January 15
Growth of Albania's commercial bank deposits accelerates to 1.3% y/y at end-January 15
Albanian c-bank to present bad loans final solution in March 16
Insurance premiums in Albania fall 13.8% y/y in January 16
EBRD president urges investors to consider Western Balkans 17
Net assets of Albanian investment funds up 5.1% at end-2015 18
EXTERNAL SECTOR 18
Albania’s trade gap widens 5% y/y in January 18
Albania’s public debt up 6.6% y/y in 2015 19
STRUCTURAL REFORMS AND CORPORATE NEWS 19
Albania introduces electronic ticket system for interurban road transport 19
Albania’s Balfin acquires local farm company to expand agricultural activities 20
TAP awards onshore construction contracts for pipeline sections in Albania and Greece 20
TransAtlantic Petroleum sells Albanian assets to GBC Oil Company 21
Bankers Petroleum announces end-2015 oil reserves volume in Albania 22
Albania launches capacity building project for gas sector with Swiss grant 23
Reshuffle among Adriatic oil and gas explorers 24
Hungary plans to subsidise flights to Albania, Macedonia, Serbia, Montenegro and Bulgaria 25
Tirana apartment prices expected to grow 15-30% - reports 26
Charterworld to develop modern yacht port in Albania 26
Albania plans to increase quota at IBRD by 357 new shares 27
Bankers Petroleum drops arbitration against Albania 27
Application for building permits in Albania goes online as of March 31 28
EU provides €12mn grant for power interconnection between Albania and Macedonia 28
The number of active mobile users in Albania up 1.2% y/y, down 5.3% q/q in Q4 2015 29
Albania cancels auction for sale of 40 obsolete aircraft 29
Albanian energy ministry requires incentives to rescue mining industry 30
Tender for Albanian free industrial zone Spitalla fails 30
Dutch co Gasunie to advise Albania on gas sector development 31
Albania pays special importance to Adriatic-Ionian Pipeline project 31
Albania calls new tender for Milot-Morine highway 32
Albania’s OSHEE plans €86.5mn investments in distribution network in 2016 32
Albania and Croatia plan to establish Tirana-Zagreb air link 33
Albania and Croatia plan to establish Tirana-Zagreb air link 33
Albania and Austria sign tourism cooperation deal 33
POLITICS 34
Italy’s army chief visits Albania on Nato cooperation 34
COMMENT: The Balkans chain reaction 34
Albania told to drop extradition proceedings against Leyton Orient owner 36
Work on electoral reforms in Albania started 37
Albanian parliament body endorses military cooperation deal with Turkey 38
US state department says Albania remains major source for marijuana production 38
EU official urges for judicial reforms in Albania as way for opening EU negotiations 39
Italy voices fears about possible influx of migrants passing through Albania 39
Albania warns migrants wait to enter country across border with Greece 40
Albanian parliament approves appointment of two new ministers 41
Albanian president endorses appointment of two new ministers 41
Albania faces political crisis as president refuses to approve new ministers 42
Albanian parliament agrees law allowing citizens living abroad to vote in country 42
Albanian ex-PM Berisha links sacking of finance minister with VAT collection plans 43
US state secretary supports judicial reforms in Albania 43
Albanian court reduces delays in trials – OSCE 44
Albanian PM replaces finance minister Cani 44

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