Intellinews - Albania Country Report - May 2012

Additional Information

The World Bank cut Albania’s economic growth estimate for this year to 1.6% from 2% and said the country should post a more robust expansion of 2.5% in 2013. Despite revising downwards its forecast, the World Bank is more optimistic about Albania’s economic growth prospects than the EBRD that sees the country’s GDP expanding by 1.2% in 2012 and by 1.8% in 2013. The estimates of both the World Bank and the EBRD are well below the Albanian government’s forecast for a 4.3% growth in 2012. 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%.

Consumer price inflation in the country accelerated for the third month in a row in May with prices rising by 1.9% y/y, following an annual increase of 1.6% in April. Albania’s producer prices grew by an annual 2.5% in Q1 2012, speeding up from 2.1% y/y in the previous quarter driven up by the manufacturing sector.

Albania’s unemployment rate remained unchanged q/q at 13.3% in the first quarter of 2012 but in annual terms it edged down by 0.1ppt. Higher budget revenues helped Albania narrow its general budget gap in the first four months of 2012 by 27.9% y/y to EUR 82.5mn, equalling to 0.8% of the projected full-year GDP, down from 1.2% a year earlier.

The Albanian Parliament has elected the ruling party’s nominee Bujar Nishani for the country’s new president at the fourth round of voting, which needed only a simple majority of 71 votes out of the 140-seated parliament. The previous three parliament sessions failed to gather the three-fifths majority required to elect a candidate to the largely ceremonial post of president.