TIRANA, Aug. 7 – The Albanian government has revised downward its GDP growth expectations for the next four years and reviewed the cut of the public debt, currently hovering at a record of around 72 percent of the GDP.
In its 2016-2018 revised macroeconomic and fiscal framework approved in late July, the Albanian government expects the country’s economy to grow by 2.7 percent in 2015, down from an initial 3 percent and has also revised downward GDP forecast for 2016 to 3.4 percent, compared to 4 percent for 2017 and 4.3 percent for 2018.
Under the previous mid-term forecast approved last January, the government expected the country’s economy to accelerate from 3 percent in 2015 to 4 percent in 2016 and 4.5 percent in 2017 and 2018.
The public debt reduction has also been revised and is expected to slightly increase to 72.2 percent of the GDP in 2015, up from 71.6 percent in 2014 before embarking on a downward trend of 71.3 percent in 2016, 69.2 percent in 2017 and 65.8 percent in 2018.
The budget deficit for 2015 has almost remained unchanged at 4 percent of the GDP and is expected to drop to 2.8 percent of the GDP in 2016.
Albania economy will be affected by international developments especially its top trading partners Italy and Greece, mainly through exports to them, remittances and foreign direct investment, says the government in its report.
Top trade partner Italy escaping recession and the start of the Trans Adriatic Pipeline construction are expected to have a major impact on the Albanian economy in 2015 after sluggish GDP growth rates of 1 to 2 percent in the past three years. However, the escalating debt crisis in Greece, the country’s second trading partner, top investor and host of more than 500,000 Albanian migrants could have spillover effects for Albania.
Public debt at around 72 percent of the GDP, non-performing loans at around a quarter, lending struggling to remain at positive growth rates and a slowdown in exports are considered key barriers to Albania’s growth.
Revised INSTAT data shows the Albanian economy grew by 2.12 percent in 2014, up from 1.11 percent in 2013, 1.42 percent in 2012, an average of 3 percent in 2010 and 2011 and a pre-crisis decade of 6 percent.
