Albanian economy is projected to expand by 1.2% in 2013, easing from a 1.6% rise in 2012, the European Bank for Reconstruction and Development (EBRD) said in the latest edition of its Regional Economic Prospects report published on Nov 11. In its previous projection from May 2014, the EBRD forecast a 1.5% y/y growth for 2013.
The downward revision came as economic activity, which had been weakening through 2012, continued to be subdued in 2013, the EBRD noted. The weak growth reflects the extent of difficulties in the eurozone and particularly in periphery countries that are Albania’s major economic partners.
Fiscal challenges are severe, with public debt above 60% of GDP, and financial sector vulnerabilities are evident with non-performing loans ration of around 25%.
Albania’s GDP growth is expected to speed up to 2% y/y in 2014, the EBRD said revising up only marginally its previous projection of 1.9%.
In regional comparison, Albanian economy will grow slower that the SEE average of 1.6% y/y in 2013 and 2.2% y/y in 2014.
We note that, the IMF projected in October a 1.7% y/y growth for Albania in 2013, revising down its previous estimate for a 1.8% y/y rise. Next year's economic growt
h estimate was also cut to 2.1% y/y from 2.5% y/y.
Albania’s government is expecting a GDP growth of 1.3% for this year.
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