TIRANA, Aug. 5 – The Albanian economy is expected to recover at a slow rate, with 2021 being the year where growth may begin again, according to the Bank of Albania.
The Governor of the Bank, Gent Sejko, speaking on behalf of the council, stated that in the baseline scenario, the peak of slowdown will be reached during the second quarter of 2020 and will remain at similar levels during the next two quarters of the year.
However, the Council also foresees an increase in employment and an increase in wages and production costs, thus making inflation a target in the Albanian economy once again.
‘This scenario is conditioned by the further course of the pandemic, the speed of improvement of economic activity in our trading partners, the impact of the pandemic on the future behavior of business and consumers, as well as the timely effectiveness of fiscal, monetary and financial measures taken so far,” Sejko said.
The earthquake that hit Albania last year, along with the COVID-19 pandemic drove the economy into a significant downfall during the first quarter of 2020.
According to the Albanian Institute of Statistics (INSTAT), the economy declined by 2.52 percent compared to the first quarter of 2019. Sectors which had the most negative impact the economy include the construction sector as well as the commerce, transport and hospitality sectors. Growth as regards the construction sector was hampered by the November 26 earthquake, dropping by 1.29 percentage points, while the rest were significantly affected by the Covid-19 lockdown measures.
According to EBRD, Albania’s economy is expected to contract by 9.0 percent in 2020 due to the coronavirus pandemic. However, the economy is expected to rebound by 12.0 per cent in 2021 on the assumption that virus containment measures are short-lived, with recovery from the earthquake providing a further boost to the economy.
