TIRANA, May 17
The European Commission has slashed Albania’s GDP forecast for 2022 to 2.7 percent from 3.7 percent predicted earlier, citing the impact of Russia’s invasion of Ukraine.
The European Commission lowered its growth estimate for Albania for 2022 by a full percentage point. The outlook highlights that the normalization of growth was dampened by uncertainty about the external environment, namely the impact of the war on the main EU trading partners, supply chains, and commodity prices.
“Overall, economic growth is forecast at 2.7% in 2022 and 3.1% in 2023. This slowdown and increasing wages are likely to moderate employment growth in 2023. However, driven by recent labor shortages, the unemployment rate is expected to decline to below 11% by 2023,” the Commission said in its Spring 2022 Economic Forecast report.
Moreover, the forecast focuses on possible downside risks mainly related to the impact of the energy price hike and low domestic hydroelectric energy production, as already seen during the first quarter of Q1 of 2022. That would widen the trade deficit, thus overburdening the public budget.
Further on, the report points out that tourism, which mainly depends on regional and EU tourists, is projected to continue supporting the growth of services exports, which is set to turn the contribution of net exports to growth slightly positive.