Albania’s economy could grow by 6.9% by the end of the year, 2.9 percentage points more than expected, according to the European Commission on Thursday (11 November).
In the Commission’s Autumn 2021 Economic Forecast report, it said “a faster than expected economic recovery is driven by a strong rebound of tourism from neighboring countries, as well as high investment growth and a recovery of private consumption.”
This is good news for Albania’s economy which fell by 4% in 2020 due to the COVID-19 pandemic and ongoing fallout from the November 2019 earthquake.
In terms of government deficit, this is predicted to decrease from 6.8% of the GDP to 4% by the end of 2022.
Key drivers of economic growth include private consumption which rose by 4.5% in 2021 and 3,5% in 2022. Public consumption growth is forecast to reach 2.5% in 2021 and 2.1% in 2022. This is a good increase from 1.6% last year.
The Commission added,”adding to the strong, but partly transitional price increases for food and transport, more persistent upward pressure from wage growth is forecast to drive the inflation rate towards the central bank’s 3% inflation target in 2023 when the very accommodative monetary policy stance is expected to begin a gradual normalisation.”
Throughout the EU, the Commission predicted economic growth of around 5% by the end of the year, meaning Albania is doing better than many of its neighbors.
