Albania Country Risk Report Q2 2020


Attention: There is an updated edition available for this report.

Albania Country Risk Report Q2 2020

We believe that Albanian economic growth will accelerate in 2020 after a 2019 slowdown. Domestic demand will remain the main engine of the economy on the back of rising consumer purchasing power, easy monetary policy and expansionary fiscal policy. The external sector will remain the weak spot for the economy, largely due to tepid economic growth in Italy, which accounts for around half of Albanian exports.

We maintain our view that Albania's policy environment will deteriorate over the coming months despite apparent progress in electoral reforms. Controversial media and judicial laws suggest that the carrot of EU accession has diminished since France, the Netherlands and Denmark blocked the start of accession talks in October 2019. Although several influential EU officials support the onset of accession talks with Albania, we continue to believe that the necessary unanimous support will be difficult to achieve and therefore expect that accession will act less and less as a policy anchor.

Key Risks



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


Executive Summary
Core Views
Key Risks
Country Risk Summary
Economic Risk Index
Political Risk Index
SWOT
Economic – SWOT Analysis
Political – SWOT Analysis
Economic Outlook
Economic Growth Outlook
Domestic Demand Will Drive Economic Recovery Despite External Weakness
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: MONETARY POLICY FORECASTS
Structural Fiscal Position
TABLE: FISCAL AND PUBLIC DEBT FORECASTS
10-Year Forecast
The Albanian Economy To 2029
Regional Outlook To Weigh On Trend Growth
TABLE: LONG-TERM MACROECONOMIC FORECASTS
Political Outlook
Domestic Politics
Policy Environment To Continue Deteriorating
Long-Term Political Outlook
Stumbling Towards The EU
THIS COMMENTARY IS PUBLISHED BY FITCH SOLUTIONS COUNTRY RISK & INDUSTRY RESEARCH and is NOT a comment on Fitch Ratings’ Credit Ratings. Any comments or data included in the report are solely derived from Fitch Solutions Country Risk & Industry Research and independent sources. Fitch Ratings analysts do not share data or information with Fitch Solutions Country Risk & Industry Research.Albania Country Risk Q2 2020ContentsOperational Risk
South East Europe
TABLE: LABOUR MARKET RISK
TABLE: LOGISTICS RISK
TABLE: TRADE AND INVESTMENT RISK
TABLE: CRIME AND SECURITY RISK
Global Macro Outlook
Economic Stabilisation Continues And Inflation Picking Up Slowly
TABLE: GLOBAL MACROECONOMIC FORECASTS (2019-2024)
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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