The World Bank Warns of FDI Inflow Decline by 2019

TIRANA, October 26

The Foreign Direct Investment inflow (FDI) in Albania are expected to account for 5.6percent of the Gross Domestic Product (GDP) by 2019, the World Bank (WB) warned. Monitor Magazine reported that according to the latest projection of the WB, FDI inflow in Albania will decline during the upcoming years.
According to the WB FDI inflow during 2017 accounts for8.3percent of the GDP while during the previous year they accounted for 8.7percent of the GDP.
Based on this projection, FDI inflow in 2019 will decline by 22percent.
The WB highlights that FDI have been the key engine of economic growth in Albania during the recent years. Hence the expected decline will create a gap.
The Albanian economy grew to 3.4 percent in 2016 due to private investment from the two major projects of Devolli HPP and the Trans Adriatic Pipeline (TAP).
The WB also highlights that remittances and FDI inflow finance most of the imports.
What does the World Bank suggest?

The WB urges the need for structural reforms in order to sustain and reinforce the balance created between the domestic sources of economic growth and an external economy that is mostly based on investments.
Moreover, the job opportunities generated by economic growth must consolidate in order to break chain migration, superficial reforms, and slow economic growth.
The WB recommends the elimination of discouraging factors and barriers on formal employment, in order to provide a faster economic growth rate, create new jobs and to reduce poverty.
Further on, improvements in the business climate and government functioning in order would have an impact on the presence of foreign companies in Albania. Another recommendation focusses on increased quality, equity and efficiency of public services and social protection schemes.

News Source: Monitor