Albania Economic Forecast

Albania Economic Outlook

June 7, 2022

Economic activity was likely dampened at the outset of 2022 by a surge in Covid-19 cases—which has since subsided, along with the associated restrictions—and the Russian invasion of Ukraine. In March, consumer confidence tumbled to its most pessimistic level since the beginning of the Covid-19 pandemic, while inflation reached its highest levels in decades, hinting at subdued private spending in Q1. Moreover, the war is expected to be taking a significant toll on the tourism sector—which accounts for around 25% of GDP—due to sharp drops in visitors from Belarus, Russia and Ukraine. Turning to this quarter, conditions have barely budged: In April, inflation rose to its highest level in over 20 years, while consumer confidence remained noticeably downbeat. Meanwhile, amid the backdrop of war to the east, Albania and North Macedonia urged the EU to accelerate their accession processes.

Albania Economic Growth

The economy is set to expand at a more moderate rate in 2022, as the favorable base effect reduces and higher inflation chips away at purchasing power. That said, government support measures should provide some cushion to private spending. Heightened uncertainty stemming from the war in Ukraine dampens the outlook nevertheless. FocusEconomics panelists project the economy to expand 3.0% in 2022, which is down 0.1 percentage points from last month’s forecast. In 2023, the panel sees the economy growing 3.3%.

Albania Economy Data

2015 2016 2017 2018 2019
Population (million)2.92.92.92.92.9
GDP per capita (USD)3,9554,1414,6385,2665,425
GDP per capita (EUR)3,4983,6874,0164,4394,735
GDP (USD bn)11.411.913.315.115.6
GDP (EUR bn)10.110.611.512.813.6
Economic Growth (GDP, annual variation in %)2.23.33.84.12.2
Consumption (annual variation in %)1.11.92.63.23.3
Investment (annual variation in %)3.82.56.72.6-3.1
Unemployment Rate17.314.213.412.311.2
Fiscal Balance (% of GDP)-4.1-1.8-2.0-1.6-1.9
Public Debt (% of GDP)74.073.270.268.066.6
Inflation Rate (CPI, annual variation in %)1.91.32.02.01.4
Policy Interest Rate (%)1.751.251.251.001.00
Exchange Rate (vs USD)126.1128.3110.8108.1108.6
Current Account (% of GDP)-8.8-7.7-7.5-6.8-7.7
Current Account Balance (EUR bn)-0.9-0.8-0.9-0.9-1.0
Trade Balance (EUR billion)-2.3-2.6-2.8-2.9-3.1
Exports (EUR billion)0.80.70.81.00.9
Imports (EUR billion)3.13.33.63.94.1
Exports (annual variation in %)-17.2-7.511.823.7-8.0
Imports (annual variation in %)-2.48.09.26.55.0
International Reserves (EUR)2.92.93.03.43.4

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Albania Facts

Value Change Date
Exchange Rate108.6-0.56 %Jan 01
Stock Market0.10.0 %Jan 07

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