The consequences of Russia’s war in Ukraine will slow down economic growth in Albania and the region according to the latest report by the European Bank for Reconstruction and Development.
Albania’s economy is expected to grow 3.3% during 2022, down from 3.7% forecast by the EBRD in November 2021.
“Growth is expected to decelerate to 1.7 per cent is 2022, a downward revision of 2.5 percentage points relative to the forecast made in November 2021, as Russia’s invasion of Ukraine has been having a profound impact on the economies in the EBRD regions as well as globally,” according to the report.
The global reliance on Russia and Belarus for a disproportionally high number of commodities has disrupted supply chains, increasing prices across the board, especially fuel prices.
While the report finds that all Western Balkan countries would be affected by higher oil and gas prices, it argued that “North Macedonia and Albania are more exposed than others to an increase in electricity prices as they import a significantly higher amount of power than they export.”
Furthermore, the EBRD concluded that “inflationary pressures have been greater in lower-income economies where food commodities (such as grain or corn) and energy account for a higher share of consumption.”
Since February, fuel and food prices have soared in Albania leading to a constant stream of protests by Albanian citizens.
The government of Prime Minister Edi Rama unveiled a 7-point ‘social resistance’ package in response, but citizens argue these measures are not enough.
Rama also established a transparency board to oversee fuel prices. The board sets the price for a period of several days for all oil and gas station.
Nevertheless, the price decided by the board over the past weeks have remained continuously higher than the 2021 average.
Read More
- Analysis: As War Rages in Ukraine, Albanians Fight for Economic Survival
- Albanians Answer Back against Government Claims Their Protests Serve Kremlin
