Vienna Institute pessimistic about the Albanian economy

TIRANA, Nov. 19 – Albania’s GDP growth rates are expected to hover around 1 percent in the next couple of years, says the Vienna Institute for International Economic Studies in its new forecast on the Albanian economy. “Weak domestic demand, especially due to fiscal austerity measures, is the main reason for the sluggish development that is a far cry from pre-crisis economic dynamics. The signals emanating from the private sector are contradictory and do not make for a more optimistic outlook at present,” adds the Vienna Institute whose forecast is the most pessimistic among international financial institutions which expect the Albanian economy to accelerate from 2 percent in 2014 to 3 percent in 2015 and 4 percent in 2016.
In an earlier report, the Vienna Institute said restrictive fiscal policy and reduced lending activity owing to high levels of non-performing loans will likely curtail economic growth in Albania.
Top international financial institutions such as the World Bank, the IMF and the IMF have made more optimistic forecasts about the Albanian economy.
In line with the Albanian government and the IMF, the World Bank expects the Albanian economy to recover to 2.1 percent in 2014.
The World Bank expects the Albanian GDP to further recover to 3.3 percent in 2015 and to 3.5 percent in 2016, slightly above the average of the ten Central and Eastern European economies.
Albania will see a modest upturn in 2014-2015 with growth of 1.7 and 2.0 per cent, respectively supported by a new agreement with the IMF and World Bank assistance in dealing with high levels of non-performing loans and weak credit growth, says London-based EBRD in its latest Regional Economic Prospects report. The forecasts are slightly lower compared to the Albanian government and the IMF which expect the economy to recover to 2.1 percent in 2014, up from 0.4 percent in 2013 and accelerate to 3.3 percent in 2015.