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Albania Country Risk Report Q1 2020

Albania Country Risk Report Q1 2020

We have reduced our 2019 real GDP growth forecast for Albania as a first half slowdown caused by disruptions to electricity output means that our previous forecast will not be achieved. That said, we expect these headwinds to be temporary and to have little impact on other areas of the economy, and we therefore expect a relatively robust recovery in 2020. This will be led by private consumption and government spending, which will offset external sector weakness.

The EU's decision to not begin formal accession talks with Albania will worsen Albania's political environment. Bringing Albania's institutions more in line with those of existing EU members was a major incentive for reforms, which we believe will now lose impetus. Furthermore, given that the decision appears to not only stem from France's broad opposition to EU enlargement but also from specific concerns about Albania – it is unclear if and when further progress will be made. Therefore, the deterioration in the political environment risks becoming a longer-term structural trend as opposed to a temporary setback.

Major Forecast Changes

We have revised downwards our 2019 real GDP growth forecasts to 2.8%, down from 3.6% previously.

Key Risks

Political risk is looming with tensions between the government and opposition parties building. To the extent that this leads to instability, economic growth could come in below our current forecasts.


Executive Summary
Core Views
Major Forecast Changes
Key Risks
Country Risk Summary
Economic Risk Index
Political Risk Index
SWOT
Economic – SWOT Analysis
Political – SWOT Analysis
Economic Outlook
Economic Growth Outlook
Economy To Recover Rapidly From 2019 Slowdown
GDP By Expenditure Outlook
TABLE: GDP GROWTH FORECASTS
Outlook On External Position
TABLE: TOP FIVE GOODS IMPORTS IN 2018
TABLE: TOP FIVE GOODS EXPORTS IN 2018
TABLE: CURRENT ACCOUNT BALANCE FORECASTS
Monetary Policy Framework
TABLE: POLICY FORECASTS
Structural Fiscal Position
TABLE: FISCAL AND PUBLIC DEBT FORECASTS
10-Year Forecast
The Albanian Economy To 2028
Regional Outlook To Weigh On Trend Growth
TABLE: LONG-TERM MACROECONOMIC FORECASTS
Political Outlook
Domestic Politics
EU Accession Roadblock Will Worsen Political Environment
THIS COMMENTARY IS PUBLISHED BY FITCH SOLUTIONS MACRO RESEARCH and is NOT a comment on Fitch Ratings’ Credit Rating. Any comments or data included in the report are solely derived from Fitch Solutions Macro Research and independent sources. Fitch Ratings’ analysts do not share data or information with Fitch Solutions Macro Research.Albania Country Risk Q1 2020ContentsLong-Term Political Outlook
Stumbling Towards The EU
Operational Risk
South East Europe
TABLE: LABOUR MARKET RISK
TABLE: LOGISTICS RISK
TABLE: TRADE AND INVESTMENT RISK
TABLE: CRIME AND SECURITY RISK
Global Macro Outlook
Manufacturing Weakness And Rising Political Risk To Weigh On Growth
TABLE: GLOBAL MACROECONOMIC FORECASTS (2018-2023)
TABLE: DEVELOPED MARKETS – REAL GDP GROWTH, % y-o-y
TABLE: EMERGING MARKETS – REAL GDP GROWTH, % y-o-y
Index Tables
TABLE: ALBANIA – MACROECONOMIC DATA AND FORECASTS

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