TIRANA, March 8 – The migrant crisis and uncertainty in neighboring Greece could have a negative impact on the Albanian economy, UK-based BMI Research, a subsidiary of ratings agency Fitch Group, has warned.
In a country risk report, BMI Research describes the migrant crisis that Europe is facing as key risk for Albania as borders remain sealed elsewhere.
“The migrant crisis facing Europe could weigh on Albania in the coming months, as migrants (mainly from Syria) are likely to pass through the country on their way to Western Europe,” the report says.
“The ‘Albanian’ route could become the main alternative after countries such as Hungary, Croatia and Slovenia have built border fences to stop the entry of migrants,” it adds.
The escalation of the refugee crisis in the Greek-Macedonian border has been increasingly giving rise to new fears that Albania will soon be facing a massive wave of migrants as the latter attempt to find new routes to reach the wealthy countries of northern Europe.
Uncertainty in neighboring Greece, the country’s traditional second largest trading partner, top foreign investor and the host of 500,000 Albanian migrants, could also affect Albania through lower exports and remittances.
“Uncertainty in neighboring Greece after the country’s 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,” says BMI Research.
Neighboring Greece which escaped its six-year recession in 2014 appears to have experienced a less severe than expected downturn in 2015 when growth was revised up to zero, says the European Commission.
Greece, whose position as Albania’s second largest trading partner has considerably weakened in the past crisis years after its economy shrank by about a quarter, is expected to contract by 0.7 percent in 2016 before turning to positive growth of 2.7 percent in 2017.
BMI Research expects the Albanian economy to remain attached to a relatively low growth trajectory over the coming years, amid subdued exports and government fiscal consolidation efforts.
The Fitch subsidiary expects the Albanian economy to grow by 3.1 percent in 2016 and 3.6 percent in 2017, slightly lower than the Albanian government’s forecasts of 3.4 and 3.9 percent respectively.
BMI research has earlier warned weak oil prices will affect Albania’s oil exploration and production sector, one of the country’s top exporting industries and source of foreign direct investment, in the next four years.
