TIRANA, April 14 – The Albanian economy is expected to shrink by 5 percent during 2020, as a result of the Covid-19 pandemic, according to the International Monetary Fund’s latest World Economic Outlook report. Recovery is expected throughout 2021 as the report forecasts a 2.5 percent increase in GDP, although much like the rest of the world, the economic slowdown will have major consequences.
The April 2020 forecast is much more pessimistic than that of the World Economic Outlook of October 2019, based on which the Albanian economy was expected to recover by 4 percent, from 3 percent in 2019. However, the conseuqences of last year’s earthquake and the unprecedented COVID-19 crisis combined, have shifted the scenario significantly.
Compared to other countries in the region, Albania is projeted to experience the highest recovery in 2021. The report shows that North Macedonia’s economy will shrink by 4 percent, Bosnia’s and Kosovo’s economies by 5 percent and Montenegro by 9 percent. Serbia is expected to experience the mildest recession, which is projected to experience a 3 percent economic contraction.
According to IMF, the global economy is projected to contract sharply by 3 percent in 2020, much worse than during the 2008–09 financial crisis and might be rivaling the Great Dpression in the 1930s. If the pandemic fades in the second half of 2020 and containment efforts can be gradually unwound, the global economy is projected to grow by 5.8 percent in 2021 as economic activity normalizes, helped by policy support.
The Euro Area is expected to face the biggest economic slowdown, precisely by 7.5 percent, as Italy’s and Spain’s GDPs will decline by 9.1 percent and 8 percent, respectively.
The IMF emphasizes the need for policymakers will to implement substantial targeted fiscal, monetary, and financial market measures to support affected households and businesses domestically. As regards the international arena, strong multilateral cooperation is essential to overcome the effects of the pandemic, including to help financially constrained countries facing twin health and funding shocks, and for channeling aid to countries with weak health care systems.
