TIRANA, Nov. 10 – The Vienna Institute for International Economic Studies has slightly revised upward Albania’s economic growth expectations for the next three years on stronger domestic demand, in forecasts which are still 0.4 percent to 0.6 percent lower compared to the Albanian government’s more optimistic estimates.
“Buoyant household consumption and private investment have had a positive impact on GDP growth acceleration; sluggish external demand for Albanian products partly due to shrinkage in oil and mineral exports has had the opposite effect,” says the Vienna Institute, one of the top centers for research in Central, East and Southeast Europe.
“Fiscal consolidation has mostly part been backed by containment of expenditures and a rise in revenues. Based on expectations of strong domestic demand, we have revised our forecast upwards slightly to 3 percent, 3.3 percent and 3.6 percent for 2016, 2017 and 2018, respectively,” it adds.
The projections on the Albanian economy are slightly more optimistic compared to regional Western Balkans EU aspirants such as Serbia, Macedonia, Montenegro, Kosovo and Bosnia and Herzegovina where growth for the next three years is expected to range between 2 to 3.3 percent.
The Vienna Institute is optimistic about the country’s foreign direct investment prospects, apparently fuelled by the ongoing construction of the major Trans Adriatic Pipeline and the huge Devoll hydropower plant by Norway’s Statkraft.
The Institute expects Albania’s unemployment rate to drop to 15 percent by 2018 and consumer prices to pick up to 2.8 percent, slightly below the central bank’s 3 percent target.
The Albanian government expects this year’s growth to pick up to 3.4 percent and accelerate to 3.9 percent in 2017 and 4.2 percent in 2018 and 2019.
