Albania

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Economic growth will be 3.5% in 2022. A weakening of consumption can be anticipated because wage rises will not fully compensate for surging consumer prices (nominal wages rose by 5.8% in Q1 2022, year on year, while consumer prices soared by 5.2% in January-May 2022, and are expected to reach 6.1% by the end of 2022). Still, we expect that rising employment and remittances inflows – the latter owing to persistent emigration – will in part cushion consumption. The central bank responded to the hike in inflation by raising interest rates, but the effect on credit demand will be moderate both among households and the private sector. Tourism looks promising, but the sector has not yet fully recovered from the pandemic and is strongly affected by labour market tightening. A new wave of emigration among Albania’s youth is one of the main causes. Labour market tightening is also becoming evident in other sectors such as agriculture and ICT, sectors which have huge potential given the global food crisis and growing gig economy, respectively. The energy balance improved slightly in Q1 2022. The government has become more proactive with respect to renewables by promoting and supporting the country’s potential regarding green energy.
        FORECAST*
Main Economic Indicators201920202021202220232024
Population, 1000 persons285428382812...
GDP, real change in %2.1-3.58.53.53.53.7
GDP per capita (EUR at PPP)9520911010440...
Gross industrial production, real change in %-1.1-6.326.6...
Unemployment rate - LFS, in %, average11.511.711.511.211.010.6
Average gross monthly wages, EUR426434467...
Consumer prices, % p.a.1.41.62.06.13.52.5
Fiscal balance in % of GDP-1.9-6.7-4.5-4.0-3.0-2.0
Public debt in % of GDP65.874.573.2...
Current account in % of GDP-7.9-8.7-7.6-8.1-7.5-6.7
FDI inflow, EUR m10729371032...
Gross external debt in % of GDP60.064.463.2...


Basic data are continuously updated.

* Forecasts are changed beginning of January, April, July and November.
See Press Conferences.

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Monthly Report No. 7-8/2022

Vasily Astrov, Alexandra Bykova, Rumen Dobrinsky, Selena Duraković, Richard Grieveson, Doris Hanzl-Weiss, Gabor Hunya, Branimir Jovanović, Niko Korpar, Sebastian Leitner, Isilda Mara, Bernhard Moshammer, Olga Pindyuk, Sandor Richter, Bernd Christoph Ströhm, Maryna Tverdostup, Nina Vujanović, Zuzana Zavarská and Adam Żurawski
wiiw Monthly Report No. 7-8, July-August 2022
58 pages including 4 Tables and 21 Figures

Details

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Executive summary

Vasily Astrov
in: Overshadowed by War and Sanctions
wiiw Forecast Report No. Spring 2022, April 2022 , pp. I-VII
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