Albania's economy is projected to grow by 1.7% in 2014, speeding up from 0.4% estimated for 2013, the European Bank for Reconstruction and Development (EBRD) said in the latest edition of its Regional Economic Prospects report published on May 14, confirming its previous projection made in January. The annual growth rate is projected to speed up to 2% y/y in 2015.
According to EBRD, Albania's economic growth in 2013 was minimal reflecting a combination of weak domestic demand and corporate balance sheets, as well as difficulties in neighbouring EU countries (Italy and Greece) which have contributed to a sharp drop in remittances.
The government has signed a new agreement with the IMF and, with the support from the World Bank, and has started to clear public arrears to companies, which had surged to more than 5% of GDP. The EBRD believes that this should help to alleviate the problems wiht high NPLs and weak credit growth, thus contributing to a modest upturn in growth in 2014 and 2015.
In regional comparison, Albanian economy will grow below the SEE average of 2.2% y/y in 2014.
The Albanian government sees this year's GDP growth at 2.1%. This projection is in line with the latest forecast of the IMF and the World Bank.
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