Albanias government confirms its 2012 GDP forecast of 4.3%.

By bne IntelliNews February 7, 2012
The Albanian economy is projected to grow by a real 4.3% in 2012, the government said in its economic and fiscal program for the 2012-2014 period, confirming its previous forecast made in December. GDP growth will accelerate to 5% in 2013 and will slightly ease to 4.9% in 2014. In our view, authorities remain rather optimistic considering the negative effects of the euro zone debt crisis and the economic turbulences in Albanias main trade partners. However, the base line scenario envisages that final consumption will be the key economic driver in 2012. It is forecasted to grow by real 2.1% in 2012, contributing by 1.9pps to the economic growth. Investments are forecasted to grow by 3.9% contributing by 1.3pps in GDP this year. Over the medium-term both final consumption and investments will remain key growth drivers. On the supply side, services, agricultural and industrial are expected to have the highest contribution in economic growth in mid-term. Albanian government targets to keep the budget deficit at 3% of the GDP in both 2012 and 2013, while the gap is projected to decline to 2.5% of GDP in 2014. Efforts for consolidation will be focused mainly on the expenditure side. The ratio of budget spending to GDP will decline from 28.7% of GDP in 2012 to 28.3% in 2014. Revenues will pick up only marginally to 25.8% of GDP in 2014. The level of the public debt is forecasted to drop to 59% of GDP in 2014 as compared to 58.9% of GDP in 2011. Public investments will be focused on priority sectors, such as education, infrastructure, health care, and agriculture.

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