According to the latest estimates from the World Bank, this year the Albanian economy is expected to grow by 3.6%, i.e. + 0.8% compared to the earlier forecast made in June.
The WB report highlights that Albania’s economy, in the period 2019-2022, showed remarkable resilience to the difficult situation created by the earthquake, the pandemic and the Russian-Ukrainian conflict.
Economy rebounded strongly, with growth rates reaching 8.9% in 2021 and 4.8% in 2022. The poverty rate declined throughout 2022. Analysts believe that one of the key factors in the country’s stability is its proximity to the European Union, which facilitates investments and exports. The leading sectors of the national economy continue to be construction and tourism, as INSTAT data also confirm. By the end of the year, the record figure of 10 million foreign visitors is expected to be reached.
The World Bank highlights an acceleration of economic growth in the second and third quarters of this year, thanks to increases in wages, loans, tax revenues, consumption, investments and exports, as well as business and consumers confidence.
In the first quarter of 2023, the employment rate grew by 4.4%, reaching 64% in the first quarter, which represents the highest figure since 2019. At the same time, this year the poverty rate is expected to reach 22.2%, which represents a decrease of 1.9%.
The World Bank expects exports, consumption and investment to return to pre-pandemic levels. In 2023, public debt is expected to decline to 63.1% of GDP, with an even more marked decrease in the medium term, due to high nominal growth and the gradual reduction of the fiscal deficit.
The International Monetary Fund has also revised upwards its forecasts for 2023: the Albanian economy should in fact grow by 3.6%, i.e. + 1.4% compared to the previous projections. In 2024 and 2025 the country’s economy is expected to grow 3.3% and 3.5% respectively. Higher growth of 3.8% is expected by 2028.
The IMF believes, however, that inflation will be higher than the target set by the government, but the measures adopted should allow the purchasing power of Albanians to be preserved. The Fund’s report highlights that significant reductions in inflation are unlikely to occur before 2025 in most countries.
