EBRD downgrades Albania’s 2010 GDP growth

TIRANA, May 17 – The European Bank for Reconstruction and Development (EBRD) has downgraded Albania’s 2010 Gross Domestic Product (GDP) forecast from 2.0 in January to 1.4 in May. The 2011 forecast is 3.1%
“Albania is the one country in this sub-region that managed positive growth in 2009, but growth is likely to decrease in 2010, reflecting the impact of recent floods, a slowdown both in capital inflows and in remittances as well as slower credit growth,” said the EBRD.
Albania is particularly vulnerable to a serious Greek downturn, as the majority of remittances into Albania come from migrants in Greece, many of whom work temporarily in seasonal jobs, says EBRD in its May 2010 economic outlook report.
In the western Balkans, the highest growth rates in 2010, at just above 2 per cent, are likely to be in Macedonia and Serbia. Both countries are aided by a recovery in metals prices, which helps key industries. In the case of Serbia, a major programme of infrastructure development is underway, helping to support growth.
The EBRD is the largest institutional investor in Albania. The Bank is concentrating on developing the private sector and emphasizing infrastructure development as an integral part of business progress.
Meanwhile, the International Monetary Funds forecasts the Albanian economy will grow by 2.3 percent in 2010 and 3.2 in 2011.