TIRANA, October 22
The COVID-19 pandemic has plunged the Western Balkan countries (WB6) into an economic recession. Montenegro, Albania, and Kosovo are expected to be the worst-hit as they are highly dependent on tourism and the pandemic has been disruptive across all branches of the tourism sector. The latest Regular Economic Report from the World Bank (WB) “Un Uncertain Recovery” points out that economic growth is forecast to contract by 4.8 percent in 2020 in the Western Balkan region.
Meanwhile, the WB expects Albania’s GDP to contract by 8.4 percent by the end of 2020 while the public debt to an expected 81.3 percent of the GDP.
According to the report, business closures scaled back operations and disrupted supply chains hurt manufacturing. Further on, consumption and investment decisions have been delayed by the uncertainty about the duration of the crisis while net exports are expected to reduce growth by 3.4 pp.
Moreover, the report says that the current account deficit (CAD) is expected to rise to about 11.9 percent of GDP for 2020.
“Reduced tourist inflows, fewer textile processing orders, and lower oil prices are expected to suppress exports by 37 percent,” the report says.
In terms of expectation for an economic rebound, the report relies on private consumption, earthquake reconstruction, and service exports such as tourism and business-process operations.
Source: The WB
Photo credit: Pavlo Rekun, Unsplush
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