TIRANA, July 14 – Uncertainties about the recovery of demand, insufficient fiscal consolidation and an ongoing slump in international oil prices could undermine Albania’s mid-term growth prospects in the next three years, according to a report by the Albanian Centre for Competitiveness and International Trade.
The report ranks the considerable uncertainty about the pace of domestic and external demand which could also delay the implementation of critical structural reforms as the number one downside risk affecting Albania’s expected mid-term growth of an average of 4.5 percent annually from 2016 to 2019.
“The risk of insufficient fiscal consolidation could also undermine investor confidence and medium-term growth while the ongoing sharp decline in international oil prices could negatively affect investments in this sector despite the positive impact on households,” says ACIT in its 2014 trade report on Albania.
The prospects supporting Albania’s growth acceleration include higher investments following Albania’s EU candidate status and the expected start of membership negotiation, ambitious reforms improving business climate and productivity, the recovery of main trading partners, and a boost in energy-related projects.
“Steeper fluctuations of exports reveal the influence of other factors, including ups and downs in demand from other countries, price movements in global products such as energy, fuel, minerals, changes in weather conditions mostly affecting the supply and demand in energy, and agriculture products,” says ACIT.
Albania’s exports suffered a setback in 2014 affected by poor electricity and oil exports. INSTAT data shows exports grew by only 3.75 percent in 2014, while imports were up by 6.7 percent, further widening the trade gap in a net importer such as Albania.
Exports grew by 15.6 percent in 2013, registering growth rates for the fourth consecutive year after the shrink at the onset of the global crisis in 2009.
