Albania real GDP will grow 4.5% in 2021, says the Vienna Inst. for International Economic Studies

Tirana Times
By Tirana Times April 15, 2021 11:23

Albania real GDP will grow 4.5% in 2021, says the Vienna Inst. for International Economic Studies

The new Vienna Institute for International Economic Studies forecasts for Eastern Europe suggests that Albania real GDP growth for 2021 will be 4.5%. This year the strongest growth according to the report will be seen in Montenegro (6.5%), Turkey (5.8%), Serbia (5%), Kosovo (4.8%), Croatia and Albania (4.5%). The growth of Eastern Europe is expected to be 3,8% in 2021, which is similar to the growth predicted also for the euro area. According to the latest report of the Institute, the surging of infections over the last months will delay economic recovery in the Central, East and Southeast Europe countries, meaning that the “CESEE countries’ outperformance of Western Europe is therefore unlikely to be repeated this year,” says the deputy director and co-author of the report, Richard Grieveson says. During 2020, in the 23 countries of CESEE, the average weighted real GDP fell by 2,3%, “only a third of the euro area’s decline over the same period.” While CESEE’s aggregate 2.3% real GDP contraction in 2020 was substantially lower than in 2009, following the global financial crisis (-5.6%), both EU-CEE and the Western Balkans suffered deeper GDP declines last year than in 2009.

The Institute writes that the forecasts are being undertaken at a time of almost unprecedented economic uncertainty, “reflecting the current high level of infections across most of Europe and the so far disappointing vaccination campaign across most of the continent.” According to Grieveson, "the downside risks to our projections are significant if vaccination rates do not increase enough to get ahead of the COVID-19 mutations.” If the virus will mutate it may come with an extension of lockdowns, impacting directly and negatively the economy of the region. The report suggests that vaccination rates are a key factor to provide an economic recovery. Also, the Institute projects that all CESEE economies will recover economically over the next three years, with major differences in pace.

Tirana Times
By Tirana Times April 15, 2021 11:23