TIRANA, Sept. 2 – Albania will remain attached to a relatively low growth trajectory over the coming years, amidst weak private consumption and government fiscal consolidation efforts, says MBI Research, a Fitch Group company.
More efforts need to be made to implement structural reforms aimed at tackling corruption and improving labour market flexibility, if Albania is to have any hope of converging with historically more developed regional peers, suggests the report.
“Uncertainty in neighbouring Greece throughout the country’s 2015 debt crisis will increase the scope for regional instability. It will also weigh on demand for Albanian exports to Greece and remittances inflows from Albanian workers based in Greece,” warns the report.
The report also notes the early 2015 flooding in southern Albania could have a serious impact on the GDP.
“Flooding in February 2015 could weigh on real GDP growth more than we currently forecast. This could happen through two main channels. The first is that damaged agricultural crops could weigh on the incomes of the significant proportion of Albanians employed in the agricultural sector. The second is that the Albanian government may have to spend more money repairing flood damaged buildings and infrastructure,” says the report.
