World Bank: Albania’s 2011 GDP growth predicted at 3.7 %

TIRANA, March, 21 – The World Bank is optimistic Albania will see positive economic growth as part of the trend observed in the global economy even though the crisis effects are still visible and might linger for a while around the globe. Offering a look at the latest information from the fragile economies around the world, the World Bank has given Albania a positive grade. Even though the World Bank’s forecast does not match the government one, the figure does reflect a growing economy.
The World Bank has forecast economic growth at 3 percent for 2010 and 3.7 percent for 2011. Both predictions are below the government’s numbers, which show an increase of 5 percent this year.
In 2012, the World Bank prediction gets even better, placing the growth figures at 4.2 percent for GDP growth. Meanwhile, the report also looks at the current account balance. Albania had a -12.2 percent deficit in 2010, according to the bank. However, it is positive that the performance of the current account balance is improving.
The World Bank report on global economic forecasts highlights once again that there is some risk countries can be threatened by the failures of other countries in crisis.
Albania too can be affected by the risks of its neighbors, with whom it has close economic relations. So the bank notes the country’s economic growth will not be able to rely so much on financial institutions that have Greek capital. That’s because the parent banks will have to be more careful about their funding initiatives. But this is not the main problem of the economy. According to the World Bank, Albania is a country that benefits to a large extent by remittances. During 2011, although there may be some improvement in the level of remittances, their level will still continue to remain below the level of 2008. Another problem raised in the report relates to trade. The situation of the country’s main trading partners, such as Greece and Italy, can affect the economy.
“How hard these countries will be hit depends on the duration of the fiscal contraction that has started and how much they will be able to increase sales in other markets,” the report said referring to a number of countries, including Albania. For its part, the Albanian Institute of Statistics has published its data for the third quarter of 2010, marking an economic growth of 4.9 percent. This increase is considered high given that in the second quarter the increase was only 1.6 percent. The data provide the first information available for the third quarter of 2010, in connection with quarterly GDP
expressed in volume terms, stripped of seasonal effects. Statistics for the period are based on information collected until December 2010 and are subject to subsequent revisions due to the improvement of information in the future.
The evaluation of quarterly GDP is done through an indirect method, because of the available data sources that are used to produce value added based on quarterly reports that occupy these indicators. This method is based on the assumption that for the period the ratio between value added and production is constant.