The Albanian economy has seen a significant downturn during the first trimester of the year, reflecting the immediate effects of the coronavirus pandemic, concludes a European Commission report on the economic state of candidate and potential candidate countries.
The report foresees an even deeper recession during 2020, with economies mostly recuperating during 2012.
Albania’s economic downturn began in 2019, according to the report. The economy saw a 0.1% contraction in the last trimester of 2019, as compared to the same period in 2018. The first trimester of 2020 shrank by 2.5% as compared to the first trimester of 2019.
The contraction of the economy has continued during the second trimester of this year, and the report foresees a 4.8% drop in the country’s 2020 gross domestic product.
The forecast for 2021 emerges as more hopeful. The report foresees a 4.2% upturn. However, this upturn will not entirely make up for this year’s contraction.
Except for agriculture and real estate activities, economic output shrank in all sectors.
The construction industry suffered the largest contraction, at -14.8% in the fourth trimester of 2019 and -16.7% during the first trimester of 2020, constituting nearly half of the entire economic downturn during that trimester.
Investments saw a 12% drop in the fourth in the fourth trimester of 2019 and a 16.7% drop during the first trimester of 2020, as compared to the same period of the previous year.
During the first trimester of 2020, exports fell by 2.1%.
Unemployment
During the first trimester of 2020, the unemployment rate (among people aged 15-64) rose to 11.9% from 11.6% in the last trimester of 2019, which still compared positively to the 12.6% unemployment rate in the first trimester of 2019.
About 17,000 people are estimated to have lost their jobs during the first trimester of 2020, with unemployment rising by 1.7% compared to the last trimester of 2019. Nonetheless, the employment rate during the first trimester of 2020 rose by 0.7% as compared to the same period in 2019.
Job losses were most prominent in the bar and restaurant industry, for which unemployment rose by 22% when compared to last year. For industrial producers the unemployment index rose by 4%, driven by the export oriented manufacturing and mining industries.
These conclusions, however, do not take into account job losses during the second trimester of 2020.
