Albania Economic Outlook

July 2, 2019

Economic growth likely slowed in the first quarter as suggested by available data. Building permits rose only tepidly in Q1 and power generation was anemic, while wages increased robustly and should have supported private consumption. Looking at the second quarter, trade data for April and May showed a pick-up in building materials and metals imports, suggesting the construction sector continued to gain traction. Trade data simultaneously showed a widening of the trade deficit on dropping exports owing to weakness in domestic power generation, while imports rose steadily. In politics, President Ilir Meta tried to cancel the 30 June local elections through a decree, only to be resoundingly rejected by Parliament, while a decision on EU accession talks has been postponed until October.

Albania Economic Growth

While political instability is likely to remain rampant, the economy should perform well this year on the back of a tightening labor market and low interest rates supporting private consumption. Power generation should also prove supportive, although potential droughts threaten the sector, and softening growth in the Eurozone further clouds the outlook. FocusEconomics panelists expect growth of 3.7% in 2019, which is down 0.1 percentage points from last month’s forecast, and 3.6% in 2020.

Albania Economy Data

	2013	2014	2015	2016	2017
Population (million)	2.9	2.9	2.9	2.9	2.9
GDP per capita (USD)	4,298	4,714	3,955	4,141	4,640
GDP per capita (EUR)	3,307	3,444	3,550	3,728	4,068
GDP (USD bn)	12.4	13.6	11.4	11.9	13.3
GDP (EUR bn)	9.6	9.9	10.2	10.7	11.7
Economic Growth (GDP, annual variation in %)	1.0	1.8	2.2	3.3	3.8
Consumption (annual variation in %)	1.8	2.8	1.1	1.9	2.3
Investment (annual variation in %)	-2.0	-4.5	3.8	2.5	5.5
Unemployment Rate	17.6	18.0	17.3	14.2	13.4
Fiscal Balance (% of GDP)	-5.0	-5.2	-4.1	-1.8	-2.0
Public Debt (% of GDP)	65.5	70.0	72.7	72.4	70.1
Inflation Rate (CPI, annual variation in %)	1.9	1.6	1.9	1.3	2.0
Policy Interest Rate (%)	3.00	2.25	1.75	1.25	1.25
Exchange Rate (vs USD)	102.2	115.7	126.1	128.3	110.8
Current Account (% of GDP)	-9.3	-10.8	-8.6	-7.6	-7.4
Current Account Balance (EUR bn)	-0.9	-1.1	-0.9	-0.8	-0.9
Trade Balance (EUR billion)	-2.0	-2.2	-2.3	-2.6	-2.8
Exports (EUR billion)	1.1	0.9	0.8	0.7	0.8
Imports (EUR billion)	3.0	3.1	3.1	3.3	3.6
Exports (annual variation in %)	21.8	-12.7	-17.2	-7.5	11.8
Imports (annual variation in %)	-2.3	3.9	-2.4	8.0	9.2
International Reserves (EUR)	2.0	2.2	2.9	2.9	3.0

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Albania Facts

	Value	Change	Date
Exchange Rate	108.3	-0.56 %	Jul 11
Stock Market	0.1	0.0 %	Jul 11

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