Albania, a leader of economic growth among the countries of the region

Albania, a leader of economic growth among the countries of the region
Albania leads the list of the countries of the region as far as its economic growth from one quarter to another is concerned. This is confirmed by data of the Bank of Albania, referring to the main economic indicators of several countries of the region. According to these data, at the end of last year, 2016, Albanian economy registered its highest level of growth in the region, at a level of 4%. Albania was followed by Turkey, with 3,5% and Kosovo with 3%. Albania’s economic growth has seen an increase compared to the third quarter of last year when the rate of this growth was 3.1%. But this figure was still significant when compared to countries such as Greece or Macedonia, which registered a 2% economic growth, Serbia which registered 2.8% economic growth and Italy, which registered a 1% economic growth.

This shows that in spite of its problems, Albanian economy is registering a progressive growth. “Economic growth in the main commercial partners in the Balkans for 2016, backed by investments and private consumption and a little less by exports. An exception here is Turkey, the economy of which slowed down significantly as a result of internal political tension. But Macedonian economy too, registering a lower growth rate in 2016 with 2.8% as opposed to 3.5% last year. This was caused by the fall of investments. The political crisis in Macedonia seems to have had an impact on the business climate”, experts of the Bank of Albania explain.


On the other hand, experts of the Bank of Albania quote the fact that the economic perspective of the partner countries of the region for 2017 is positive. “Economic growth is expected to be boosted by aggregate demand, while the risks stem from the course of developments in large economies and internal political tension such as in Macedonia and Turkey”, they argue.

 Inflation-Prices growing everywhere, in Albania, close to the permitted rate

Price increases don’t seem to stop in the countries of the region, where Albania is part of. Meanwhile, as far as Albania is concerned, this index has achieved the maximum level permitted by the Bank of Albania, 2,5%. According to the Central Bank, inflation has been 2.4%. “Inflation rates have registered an increase in all countries. High food prices and basic goods in international markets are the main factors leading to a rise in inflation”, the Central Bank confirms, to continue with the listing of this index according to the different countries. Macedonia’s inflation rate was 0.5%, Italy and Greece’s inflation rates were 1.3% and 1.4% respectively. This index seems to be higher in Turkey during the first half of this year, registering an inflation rate as high as 10.2% as a result of the recent political developments in this country.


“Geopolitical tension

is a threat for the economy”

“Expectations for the economic developments in the future are positive.  However, there are risks relating to the political situation in several countries of the European Union and geopolitical tension. The effects of these risks can also affect small economies of the region, which have seen a sustainable growth rate. Uncertainties over the perspectives of economic policies remain factors of risk along with the lack of political stability in particular states and regions”.

This is the warning which is given in the latest report of the Bank of Albania in relation to the economic performance in the region and beyond, including Albania. Let us not forget that some of the countries of the region such as Macedonia or Kosovo are currently in a deep political crisis, which in all likelihood, will also generate negative effects in the economic future. However, according to experts of this bank, international economic and financial environment in general seems to have been improved recently.

Albania’s main partners have registered different dynamics of development.

“Economies in countries that Albania has trade relations with such as Italy and Greece, have experienced different dynamics of economic development”. This is another analysis that the Bank of Albania makes to the economic growth of the region, where our country is part. “Italy has seen economic growth in the last quarter of 2016”, the report says. Meanwhile, as far as Greece’s economy is concerned, the report in question quotes that this economy has shrunk significantly in the fourth quarter of 2016, reflecting the reduction of investments and expenses for consumption. “Situation in the future is filled with uncertainties which are caused by possible problems in the management of sovereign debt”, the Bank of Albania says.

Eurozone is performing better than before, experts predict a growth

“Eurozone economy has seen a positive growth in the last quarter of 2016. The strengthening of economic activity relies on the growth of consumption, while investments are offering a positive contribution”.

This is another finding made by the experts of the Bank of Albania, while making a general analysis of the economy of the region and beyond. According to them, the growth of consumer expenses has reflected the improvement in the labor market and the favorable conditions of lending, as a result of more favorable monetary policies. The report also adds that economic growth in the Eurozone is expected to be positive and sustainable for the period to come.

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