Albania

Albania Economic Forecast

Albania Economic Outlook

Year-on-year economic growth moderated but remained robust in Q4, restrained by a softer increase in private consumption but fueled by a faster expansion in fixed investment. Data for H1 paints a mixed picture. Tourist arrivals increased by over 50% in January-April compared with the same months of 2022. Moreover, inflation fell in the same period. That said, the trade deficit widened 2.7% in annual terms in the first four months of 2023, as exports fell more than imports. On the fiscal front, the budget surplus expanded year-on-year in the same period, as revenue growth outstripped the increase in expenditure. Meanwhile, in May, Parliament approved a 17.6% increase in the minimum wage and an increase in public sector workers’ salaries, which should support spending while potentially weighing on competitiveness and job creation ahead.

Albania Inflation

Inflation fell to 4.6% in April from 5.3% in March. The result was mainly driven by softer increases in prices for food and non-alcoholic beverages, and hotels and restaurants as well as by a sharper fall in prices for transportation. Meanwhile, at its latest meeting on 3 May, the Central Bank held the key rate at 3.00%.

This chart displays Economic Growth (GDP, annual variation in %) for Albania from 2013 to 2022.

Albania Economic Data

2017 2018 2019 2020 2021
Population (million) 2.9 2.9 2.9 2.9 2.9
GDP (USD bn) 13.0 15.1 15.4 15.2 17.9
GDP per capita (USD) 4,516 5,250 5,343 5,270 6,239
GDP (EUR bn) 11.6 12.8 13.8 13.3 15.2
GDP per capita (EUR) 4,006 4,446 4,773 4,623 5,277
GDP (ALL bn) 1,551 1,637 1,692 1,647 1,856
Economic Growth (Nominal GDP, ann. var. %) 5.3 5.6 3.4 -2.6 12.7
Economic Growth (GDP, ann. var. %) 3.8 4.0 2.1 -3.3 8.9
Private Consumption (ann. var. %) 2.6 3.1 3.3 -3.3 4.7
Government Consumption (ann. var. %) 3.2 0.7 2.9 1.5 7.8
Fixed Investment (ann. var. %) 6.0 2.3 -3.6 -1.4 19.2
Exports (G&S, ann. var. %) 13.2 4.0 2.6 -27.9 52.0
Imports (G&S, ann. var. %) 8.4 2.4 2.3 -19.8 31.5
Retail Sales (ann. var. %) 1.2 2.5 3.7 -1.2 10.6
Unemployment (% of active population, aop) 13.8 12.3 11.6 11.7 11.6
Fiscal Balance (% of GDP) -2.0 -1.6 -1.9 -6.7 -4.6
Public Debt (% of GDP) 70.2 67.7 65.8 74.3 74.5
Inflation (CPI, ann. var. %, eop) 1.8 1.8 1.1 1.1 3.7
Inflation (CPI, ann. var. %, aop) 2.0 2.0 1.4 1.6 2.0
1-week Repo Rate (%, eop) 1.25 1.00 1.00 0.50 0.50
Exchange Rate (ALL per USD, eop) 112 108 109 101 107
Exchange Rate (ALL per USD, aop) 119 108 110 109 104
Exchange Rate (ALL per EUR, eop) 134 123 122 123 121
Exchange Rate (ALL per EUR, aop) 134 128 123 124 122
Current Account Balance (EUR bn) -0.9 -0.9 -1.1 -1.2 -1.2
Current Account Balance (% of GDP) -7.5 -6.8 -7.9 -8.7 -7.7
Merchandise Trade Balance (EUR bn) -2.8 -2.9 -3.1 -3.0 -3.8
Merchandise Exports (EUR bn) 0.8 1.0 0.9 0.8 1.3
Merchandise Imports (EUR bn) 3.6 3.9 4.1 3.8 5.1
Merchandise Exports (ann. var. %) 11.7 23.7 -8.1 -12.5 59.4
Merchandise Imports (ann. var. %) 9.2 6.5 5.0 -6.8 34.9
Foreign Direct Investment (EUR bn) 1.0 1.1 1.1 0.9 1.1
International Reserves (EUR bn) 3.0 3.4 3.4 3.9 5.0
International Reserves (months of imports) 9.9 10.6 10.0 12.5 11.7
External Debt (EUR bn) 7.9 8.1 8.3 8.6 9.1
External Debt (% of GDP) 68.4 63.3 60.6 64.9 59.9

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