TIRANA, Jan. 20 – The World Bank has kept unchanged its forecast for the Albanian economy and expects growth to accelerate from 2.1 percent in 2014 to 3 percent in 2015.
In its South East Europe Regular Economic Report issued this week, says Albania has shown signs of a more sustained recovery on the back of increasing exports, particularly in the second half of the year.
At 2.1 percent in 2014 and 3 percent in 2015 Albania would register among the highest growth rates in the SEE6 which also includes Bosnia and Herzegovina, Kosovo, Macedonia, Montenegro, and Serbia.
World Bank experts said the slowdown in the eurozone, which is Albania’s top trade partner, had been compensated by better than expected performance in domestic investments and consumption.
“Through the year in Albania, we have seen the economy improve and I believe even the European Bank for Reconstruction and Development will revise its forecast to 2 percent. Both the World Bank and the EBRD are based on the same data produced by Albanian institutions and it is impossible to have such huge difference on the growth forecast,” said Ellen Goldstein, World Bank Country Director for South East Europe.
The World Bank warns a further fall in oil prices would have significant impacts on the current account balance in all countries except Albania which has large oil exports and could therefore suffer from the current low oil prices. Citing a sharp drop in international oil prices, Canada-based Bankers Bankers Petroleum has announced a slowdown in production for the first time since a decade of operating the Patos-Marinza heavy oilfield in south-western Albania. Bankers Petroleum is the country’s largest foreign investor and taxpayer.
Devastating flooding in Serbia and Bosnia and Herzegovina brought the economy of South East Europe to a standstill in 2014, with growth of only 0.2 percent, according to the World Bank’s latest South East Europe Regular Economic Report (SEE RER).
Growth is likely to be held back in 2015 by a weak recovery in Bosnia and Herzegovina and Serbia. The rest of the region is expected to grow by over 3 percent in 2015, with economic growth reaching 3.8 percent in FYR Macedonia.
Growth prospects are dependent on external factors, including a sustained recovery of external demand, especially in Europe, and stabilization of international energy prices at around current levels.
Economic activity in SEE6 is dampened by weak domestic demand as consumer and business confidence remain weak over lingering political uncertainty, chronically high unemployment, and banking systems saddled with high nonperforming loans, says the World Bank.
