The study “Economic growth in 2023 challenged by informality and black money” is published

At the beginning of the second 6-month period, after an assessment and ongoing monitoring of the economic situation, but also the positions held by the financial and fiscal institutions, as well as based on the comments and recommendations from the IMF, #ALTAX experts have elaborated and present as a novelty for the reader a paper dedicated to the fact that economic growth should be seen from the whole in the conditions of informality combined with the phenomenon of inflation and black money.

The study “Economic growth in 2023 challenged by informality and black money” is an analysis based on statistical data from the year 2018, the year 2021 – 2022 and the first quarter of 2023.

In the analysis carried out with care, it is noted what impact the factors that make up the growth of the Albanian economy have achieved and how the problems that have accompanied the Albanian economy and the environment in the current environment with risks from inflation, informal money and the undervaluation of the Euro have been combined.

This position paper on consumption analysis and will be divided into four basic evaluation elements, where the sections stand out:

(1) a comparative level presentation between quarterly periods of household consumption, government consumption, gross capital formation, and import and export data.

(2) the differences and changes that emerge in the comparisons between the quarterly periods for the years 2018, 2021, 2022 and the first quarter of 2023.

(3) the analysis of the indicators using the data on the volume of visitors and the income they have brought to the Albanian economy and

(4) a description of the construction and risk sector with increased attention to other sectors as well. The aspect of informality and black money have been addressed along with inflation.

Most of the efforts in consumption analysis in recent years have been directed at obtaining functional forms, which allow quite flexible response coefficients, as well as to estimate the specific demand parameters of the income strata that have been used to estimate distributional impacts. of different intervention policies.

In this paper, the authors examined the structure of final consumption related to household goods and the impact of structural factors on this indicator.

Despite the high economic growth compared to its neighbors, the ratio of taxes and duties to GDP has not shown a proportional increase. In fact, this ratio has become more regressive due to the increase in the percentage of indirect taxes at the time of inflation.

This acts as a double whammy for growth.

Black money combined with informality and the effects of inflation and an overvalued exchange rate for the lek means a significant loss of revenue for the government that could be used to boost economic growth, but also a loss for most citizens who are left behind. free to choose the euro as a reliable currency for everyday savings and transactions.

From everything observed in at least the last two years, the Albanian economy is still small enough to absorb important levels of cash flows. In the meantime, it is necessary that, before the policies are undertaken, they have been studied and best adapted to the context where they will be applied. In all cases, initiatives and policies should not affect the existing structure and status quo.

Black money can at best act as a stimulant or sedative that gives a temporary boost to economic growth.

Prolonged dependence on it can leave harmful effects on the country and the people.