Intellinews - Albania Country Report - March 2012

Countries covered: Albania The IntelliNews Albania Country Report is a monthly report, covering the major macroeconomic indicators and trends in Albania, as well as important political developments. Prepared by local analysts, it provides the most accurate data, updated regularly according to the data changes noted by the whole range of statistics sources. It will save the time you would need to track the figures and sources independently and will provide you with thorough analysis.

Additional Information

Albania’s economic growth slowed to 3.1% y/y in 2011 from 3.9% in 2010 and yet it was slightly above the government’s target of 3%. The GDP growth in the fourth quarter of 2011 speeded up to 3.8% y/y from 2.8% in the previous three months. The transport sector and the trade, hotel and restaurants sector were the key growth drivers. The Albanian government targets a real GDP growth of 4.3% for 2012, a very optimistic forecast when compared to the estimations of the IMF (1.5% y/y), the World Bank (2% y/y) and the EBRD (1.2% y/y). The three international institutions warned that the slower economic growth in the EU would have a negative impact on the local economy.

Consumer price inflation in the country accelerated for the first time in March after easing in the previous four months. Prices in March increased by 1% y/y, following a 0.6% rise in February.

Domestic demand revived somewhat in the final quarter of 2011 with the retail sales index picking up by 0.2% y/y, registering its first annual rise since the start of 2011. Retail sales dropped by 5.6% y/y in Q3, by 6.9% in Q2 and by 6% y/y in Q1. Albania’s general government debt increased by 8% y/y to ALL 772bn (EUR 5.5bn) at the end of 2011, equalling to 58.8% of the GDP. The World Bank’s chief economist for Europe and Central Asia, Indermit Gill, said the country needs to reduce the level of its debt and consolidate public finances in order to ease access to foreign funding.