TIRANA, Feb. 17 – London-based European Bank for Reconstruction and Development is optimistic the Albanian economy will get a significant boost in 2016 from the Trans Adriatic Pipeline and a recovery in top trading partner Italy.
Speaking in an interview, Christoph Denk, the head of the EBRD office in Albania, said the Bank expects the Albanian economy to accelerate to 3.3 percent in 2016, up from 2.2 percent in 2015 driven by foreign direct investment and improving external environment.
“Internally, in Albania, there are a few things that give rise to more optimism. One of the more concrete things is the Trans Adriatic Pipeline, where more and more works will take place in the course of this coming year, boosting for example construction,” Denk said in an interview published by FIAA, the Foreign Investors’ Association of Albania.
“We also think that the external environment is improving. For example, the Italian economy has had a couple of very difficult years but is now recovering well. That will be good for Albania as well because of its close economic ties to Italy,” he added.
Speaking about Albania’s links to the Chinese economy, which last year emerged as the country’s second largest trading partner, the EBRD representative said the slowdown in the Chinese economy and lower commodity prices will also affect Albania’s exports.
Asked about what Albania can do to further improve the business climate, Denk says treating current investors well is the best message Albania can send to potential new investors.
“It is important that Albania treats existing investors well, those who have taken the risk and have invested in the country, those who have something at stake, those who have fixed assets. These investors can be the country’s best ambassadors. We should not forget that potential new investors rely on advice from those who are already here,” he said.
The EBRD is helping the Albanian government boost lending to agriculture sector through the Albania Agribusiness Support Facility that will support local entrepreneurs through risk sharing and credit lines.
Agriculture is currently one of the key sectors of the Albanian economy, employing about half of the country’s population but accounting for only 20 percent of the GDP. Lending to this sector currently stands at a minimum of 2 percent of all bank financing.
The EBRD had earlier warned “Albania’s strong trade, investment and remittance ties to Greece and Italy, both of which face continued economic gloom, are likely to continue to constrain growth and the high level of public debt will limit the room for fiscal manoeuvre.”
Since the start of its operations in Albania, the EBRD has invested almost €1 billion in some 70 projects in various sectors of the economy.
