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Economy in 2024, Pano Soko: Inflation is extraordinary, eroding the share of economic growth

Politiko 2024-01-05 10:04:34

Economy in 2024, Pano Soko: Inflation is extraordinary, eroding the share of

Economic expert Pano Soko sees the government's forecast for an economic growth of 3.8 percent as possible, while emphasizing that for a developing country like Albania, such growth can be considered as stagnation or staying in the country.

Speaking on MCN TV, Soko said inflation is rampant and erodes the share of economic growth to be distributed to the general population.

Soko emphasizes that the increase in wages and pensions that we are talking about today is greatly eroded by inflation.

" It can be achieved of course. Albania is progressing a little, at the moment when the economic growth is above 4 percent, it is stagnating in the country when the economic growth is below 4 percent. Economic growth depends on the potential that a country has.

The more developed a country is, the less potential it has to grow. For countries like Albania, which are still underdeveloped, a growth below 5 percent is a stagnation, it is a stay in the country, considering that the inflation is also extraordinary, which erodes the part of the economic growth to be distributed in the general population. Despite some notes of optimism that we are growing, in fact we are still below our capacity to grow. Today, when we talk about the increase in wages and pensions, many are eroded by inflation. The word 'sensitive' is not quite the real word to use in these cases. We have had cases where the price of items has increased by 100 percent.

We take sunflower oil. There is an increase, but enough to cover the situation created by the increase in prices in Albania. For 7 years in a row, salaries were not indexed with the increase in inflation, now we are doing what we have not done in 7 years, in a forced way. The government gathered all the indexes of the last 7 years and did them in one year, which I believe will burden the state budget, but that remains to be seen. Governments have the power to correct the consequences of inflation. The consequences are the increase in prices, and the increase in the weight of prices on families with low incomes, whether with economic assistance, retirees, pensions of invadability, etc., the government here intervenes, offering packages that help these families overcome the period.

All the distortion of the exchange rate comes from one factor, the money that is illegally injected into the economy. Even in this case, the government has gained money through the strengthening of the lek, because the government's debt has decreased, the installments are cheaper and this has created some profit for the government. But we have one sector that is affected, which is exports, and the government will have to give this money that it earns from the fall of the euro to exporters and producers.

A good part of Albanian products have left the market. The government can do to fix the consequences, but it seems to have turned a blind eye and a deaf ear" , said the expert.