TIRANA, May 13 – Albania’s economy is expected to contract by 9.0 percent in 2020 due to the coronavirus pandemic, according to EBRD’s latest Regional Economic Prospects report.
The economy is likely to be strongly affected by the epidemic due to its high reliance on tourism and exports of low value-added intermediate goods to Italy’s fashion industry and a likely reduction in remittances will also act as a drag on growth. However, the economy is expected to rebound by 12.0 per cent in 2021 on the assumption that virus containments measures are short-lived, with recovery from the earthquake providing a further boost to the economy.
In the Western Balkans, Bosnia and Herzegovina, North Macedonia and Serbia were expected to suffer from the disruption of global supply chains, because of their strong manufacturing bases, while for Kosovo, the effects of the measures aimed at containing the pandemic, and a likely decline in remittances in particular, are expected to result in a decline in GDP of 5.0 per cent in 2020, with a rebound of 7.5 per cent in 2021
On average, the economies of this region are expected to shrink by 0.8 per cent in 2020 before rebounding with growth of 4.8 per cent in 2021.
In general, the economies of the Western Balkans region are expected to contract by 4.8 percent.
The EBRD’s central scenario is based on the prospect of a gradual relaxation of domestic measures to contain the virus and a return to normality during the second half of the year.
The EBRD’s Chief Economist Beata Javorcik said that as the world emerged from the crisis it was crucial to look towards a future of cooperation and greater economic resilience.
“The crisis has been a massive hit and coming out of it will be just as challenging. This is not the time to engage in economic nationalism and protectionism, but a time to shape a better future through international commitment to free trade, climate change mitigation and economic cooperation,” she said.
The report assumes a modest impact of the crisis on the long‐term trajectory of economic output, with growth resuming towards the end of the third quarter, but potentially significant longer-term economic, political and social effects.
