In March of this year, the whole world entered a previously unexplored territory. The outbreak of an unknown virus and its high mortality in the Lombardy area of ​​Italy caused all countries to rush to quarantine their economies, which lasted about 2 months before the gradual relaxation of measures began. 

It was the isolation that brought fatal consequences in the entire global economy, which is expected to shrink this year by about 4.5%, according to forecasts of international institutions. 

The strongest impact was in Europe, wherein the second quarter, seasonally adjusted GDP decreased by 14.7% in the euro area and by 13.9% in the European Union, compared to the same period a year earlier, according to Eurostat. This was by far the biggest drop since the start of the time series in 1995. 

In Albania, data on the gross domestic product (GDP) is expected to be published at the end of September, but preliminary figures show a strong quarantine effect, especially in services (down by more than 50% in some activities), industry, retail, exports. All of this has forced businesses to lay off staff, or small businesses to shut down. As a result, this situation has had a strong negative impact on budget revenues, forcing the increase of debts to historical levels. The only thing that went undisturbed was the construction. "Monitor" has made a balance of the effects of quarantine in the first part of the year, based on official indicators.

Quarantine caused 50.000 unemployed - INSTAT data, both administrative and Survey show that on average 49-50.000 people lost their jobs in the first 6 months of this year, compared to the end of 2019. This accounts for about 6% of the total number of employees in the country. Most of them were from small businesses, which are proving more vulnerable to the crisis, while large entities quickly recovered their workforce in June, following drastic cuts in April and May. 30% of those who came out unemployed were young people, up to 29 years old. 

Most hit services: Hotel activity (net sales volume index) shrunk by 63% in the second quarter on an annual basis; bars and restaurants with 55%; travel agencies by about 86%; transport by about 40%. The easiest was the decline in wholesale and retail trade, by -5.8%, and information and communication, -5.9%. All these activities, according to other INSTAT data, constitute over 20% of the gross domestic product. Accommodation and food service activity (bars, restaurants, and hotels) have a total of about 50.000 employees. About 14 thousand people work in transport.

Production -the industry suffers, only construction increases: In the manufacturing sector, the industry was hardest hit, with the sales index falling in volume by -20.5%, according to INSTAT. Electricity, Gas, Steam fell by 18%. Water supply, waste treatment, and management shrank by 27%. The only sector that utilized quarantine was construction. The net sales volume index under construction increased by 2.5%, compared to the same period a year earlier. Construction contributes to about 9% of GDP, while industry in total with 10.5%, where the main share is occupied by the processing one, with about 6.2%. About 45.000 people work in construction, while in the processing industry over 100.000 (half of them in textiles and shoes). 

Retail trade is more affected by clothing and publications: Retail trade in the quarantine period focused only on the purchase of essential products (food, detergents, etc.) and computer equipment, while a large part worked from home. INSTAT reported that in the second quarter, Sales by volume in retail trade decreased by 8.3%, compared to the same period of 2019. In April, for example, sales of clothing and footwear fell by over 87%, of books, newspapers, school supplies by almost 70%, other products by over 30%. These activities began recovery in June, after the end of quarantine. Retail trade is one of the largest employers in the country, with about 70.000 people, mostly self-employed who have opened various trade stores.

Exports, the biggest drop in textiles and footwear factories: European quarantine hit exporters hard, especially textiles and footwear, which are closely linked to Italy. Two other major exporters, the Petroleum Bank oil extractor and the steel processor Kurum, were forced to suspend operations. In April and May, the contraction was over 30% and then the decline rates slowed down, but continue to be negative. For the 8-month period, exports shrank by 11.6%. Textiles and footwear have halved the decline (this sector is one of the largest employers in the country, with over 55,000 employees). Only food was on the rise, while agriculture was less affected by quarantine and machinery and spare parts, as factories assembling electrical parts for the automotive industry quickly returned to production. 

Disbalance of budget indicators: In the first eight months of the year, budget revenues fell by 11.5%, mainly due to the contraction of revenues from VAT (a direct indicator of consumption in the economy) and profit tax (due to postponement of installments as a mitigation measure for businesses). On the other hand, expenditures increased by 4.3% to finance the reconstruction and the two support packages for employees. As a result, the budget deficit (debts are taken to cover the difference between expenditures and revenues) increased to EUR 420 million for the 8 months, the highest level since 2013.