The latest report from the European Commission (EC) highlights the growth trend of the Albanian economy in the first half of 2024, with an increase in real gross domestic product (+ 4.1%).
Next year economic growth is expected to be 3.8%, supported by tourism, private consumption, strong credit growth and stable financial conditions.
Inflation has more than halved in the past year, standing at 1.9% in October, but is expected to gradually return to the Central Bank’s 3% target in 2025.
Employment has increased over the past two years and the positive trend is expected to continue until 2026, albeit at a more moderate pace, accompanied by a decreasing unemployment rate. However, despite improvements in the labor market, emigration – especially youth migration – remains an issue for Albania.
Investments are growing faster than last year and it is expected that 2024 will end with further acceleration.
The good performance of the tourist season has led to an increase in exports of services. However, a reduction in exports of goods is observed due to the decrease in demand from the Eurozone countries, the fall in prices of raw materials on international markets and the strengthening of the lek exchange rate.
The European Commission highlights the improvement of Albania’s fiscal situation in 2023, with the reduction of the public deficit to 1.3% of GDP.
Public debt is also expected to decline next year, to 55.8%, according to government forecasts.
Finally, the report identifies among the risks for the Albanian economy the fluctuations of the exchange rate and the shortage of manpower.
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Photo: Gerd Altmann, Pixabay CC0
