Economy to grow by 0.7% in 2009, IMF says, but EBRD begs to differ

TIRANA, Oct 12؁lbania’s economy will grow by 0.7% in 2009, within a 0.0-1.0% range forecast in the spring, the International Monetary Fund (IMF) said.
The impact of the global crisis will continue in 2010 when the country’s growth will be 2.2%, improving in 2011 to 6%, according to the IMF. The economy in the recent years has recorded an average growth of 6% per year.
From the beginning of the year the finance ministry has maintained an official forecast of 5.8% growth for 2009, with the central bank expecting a lower figure.
Affecting the slowdown in Albania have been lower remittances from Albanian workers abroad, a fall in exports, and a decline in credit.
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The IMF expects economic contraction in Southeastern Europe (SEE) to slow down to 0.1% next year from 7.5% projected for 2009, the global lender said on Thursday.
“Emerging Europe has been hit particularly hard by the drop in capital inflows. This led to major contractions in the Baltic economies, Bulgaria, and Romania, although exchange rates acted as a shock absorber in economies with flexible regimes,” the IMF said in the autumn edition of twice-a-year World Economic Outlook.
The SEE economy grew by a real 6.1% last year, the same growth rate as in 2007, the IMF said in the report.
“In emerging Europe, following a contraction in real GDP of 5.25 percent in 2009, a return to positive growth is expected in 2010. Over the medium term, GDP growth is likely to return to pre-crisis rates only gradually, as supply remains sluggish and balance sheet adjustment continues to weigh on demand.”

In a different forecast all economies of SEE countries, except for Bulgaria, are expected to switch to growth next year, while Albania is the only economy expected to show growth in 2009. This time the revised forecast came from the European Bank for Reconstruction and Development (EBRD).
However, in difference from the IMF report, Albania’s economy will grow by 3% in 2009 and only by 1.6% in 2010.
Economic growth in the EBRD region is now projected at 2.5% for next year, up from 1.5% forecast in May, which mostly reflects the recovery from a deeper than anticipated downturn in the first half of this year, rather than a more vigorous economy during 2010, EBRD said in a statement.
Signs of positive growth in the third quarter of 2009 suggest that the recession is now bottoming out in many countries of the EBRD region. However, any upturn in 2010 is likely to be fragile and patchy, it added.