TIRANA, April 28 – Albania registered one of the lowest growth rates among seven EU aspirants in 2015, but is expected to catch up with its regional competitors in the next couple of years, says the European Commission in its latest report on candidate and potential candidate countries.
The Albanian economy accelerated to 2.6 percent in 2015 but remained among the poorest performing along with Serbia which similarly to Albania suffers high levels of public debt and non-performing loans. Serbia’s economy is estimated to have grown by 0.7 percent in 2015 following a contraction in 2014 when it was hit by severe floods.
GDP growth in Bosnia and Herzegovina, Montenegro, Kosovo, Macedonia and Turkey ranged from 3.2 percent to 3.5 percent in 2015.
During the global crisis years of 2009 to 2012 Albania was among the best performers at a time when most regional countries suffered negative growth rates.
Prospects for the next couple of years appear more optimistic as the European Commission expects the Albanian economy to slightly accelerate to 3.5 percent in 2017 compared to the Albanian government and IMF forecasts of 3.4 percent in 2016 and 4 percent in 2017.
“High unemployment rates, ranging from 17.5 percent in Albania and 17.6 percent in Montenegro to 26.1 percent in Macedonia and 42.9 percent in Bosnia and Herzegovina, remain a key challenge for policy makers in the region,” said the European Commission.
Very high external imbalances remain another concern in most Western Balkan countries, reflected in large merchandise trade deficits ranging from around 13 percent of GDP for Serbia to equal or above 20 percent for Macedonia, Albania and Bosnia and Herzegovina and around 41 percent of GDP for Montenegro and Kosovo, says the Commission.
In its latest Winter Economic Forecast report, the European Commission said foreign direct investment focusing on energy related will be a major driver of growth for the Albanian economy but warned the extractive industry, which has been adjusting to lower prices for oil and other commodities by cutting production, will likely be a drag on economic growth.
The good news is that both Italy and Greece, the country’s top trading partners, are projected to recover in the next couple of years with positive effects on Albania’s trade exchanges, investments and remittances from the two neighboring countries, host to about 1 million Albanian migrants.
