The International Monetary Fund, on its first post-progamme monitoring review for Albania, has announced that the country’s GDP will decline by 7.5% in 2020, due to consequences of COVID–19 and last year’s earthquake.
Albania has been a beneficiary of the IMF’s emergency financial assistance fund at the amount of $190.5 million which were disbursed in April 2020 as a means of balancing the payments in the aftermath of the November 2019 earthquake and spread of COVID-19 pandemic.
The IMF’s estimation is however subject to uncertainty given the high risks in the downside. With the increasing number of infections in Albania as well as across other European countries, the downside risks are increasing accordingly. A further spread of the pandemic would diminish Albania’s economic outlook, where tourism, remittances, FDI and foreign demand would fall. Inflation on the other side is said to remain subdued before converging to the 3 percent target over the medium term while the current account deficit is projected to widen to more than 10 percent of GDP in 2020, IMF officials said.
On the bright side, IMF estimates that Albania’s economy will rebound in 2021 by 5.4% given as shock will moderate and construction spending will increase.
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