Albania Economic Forecast

Albania Economic Outlook

September 8, 2020

The economy likely contracted sharply in Q2, hit by the pandemic and associated lockdown measures, and available data for Q3 points to a still difficult economic situation. After having vanished in Q2, tourist arrivals were still almost two thirds lower in July compared to the same month in 2019. Likewise, exports contracted at a softer, albeit still sustained, rate in the same month, showing anemic foreign demand. The notable reduction in economic activity, coupled with increased counter-cyclical spending, led to a significant widening of the budget deficit in January–July, according to the finance ministry, increasing the pressure on the country’s already-weak fiscal position. Meanwhile, in late August, the government announced it was seeking a USD 80 million loan from the World Bank to support public funds and improve the fiscal system.

Albania Economic Growth

GDP is projected to contract heavily this year as lockdown measures undercut the tourism industry. Moreover, soaring unemployment and falling consumer confidence will constrain household spending, while companies will delay investment projects. A widening government deficit in response to the crisis clouds the outlook. FocusEconomics panelists project the economy to contract 5.5% in 2020, which is up 0.1 percentage points from last month’s estimate. In 2021, the panel sees the economy growing 6.2% in 2021.

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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