Albania International Reserves (EUR bn)

The economy likely moved into a lower gear in Q4, after year-on-year GDP growth accelerated in the previous quarter thanks to a sharp rebound in construction activity. The pace of the year-on-year expansion in merchandise exports moderated in Q4 compared to Q3, pointing to a weaker global economic backdrop. Similarly, the average annual growth in merchandise imports slowed in the same period, suggesting softer domestic demand amid high inflation. Moving into Q1, the economic picture is fairly upbeat. Merchandise exports increased at a faster pace than in Q4 in January, as did merchandise imports. Economic sentiment improved in the same month, and the tourism sector is seemingly reaping the fruits of the removal of Covid-19 restrictions worldwide; tourist arrivals were up 94% over the same month in the previous year in January.