TIRANA, Jan 22 /ATA/ The economic recovery, after rapid growth over the past year, is expected to approach the long-term rate.
The European Bank for Reconstruction and Development (EBRD) predicts that this year, economic growth will be 3.7%. Meanwhile, Ekaterina Solovova, head of the EBRD in Albania, stated in an interview with “Monitor” that the risks continue to remain high as is the ongoing uncertainty about the pandemic.
“In the first half of the year, Albania has recorded stronger than origanllly expected economic growth and short-term indicators signal the continuation of a healthy recovery in the second half of the year. Internal and external demand increased significantly. Investments recovered strongly and exceeded the corresponding level of 2019, unlike most other countries in the Western Balkans region. The tourism sector, which historically accounts for about one-fifth of Albania’s GDP, recovered almost to its pre-pandemic level in the peak summer months. “We expect Gross Domestic Product (GDP) to grow by about 8% in 2021,” said Solovova.
Regarding expectations, Solovova stressed that “we expect economic growth to level off closer to its long-term rate, to about 3.7% in 2022. While there is still room for tourism to recover and grow further, the impetus is unlikely to be as strong as this year, given that strong recovery has already occurred. “Continuous expansion of investment is a new premise for economic growth.”
Other sources of vulnerability, she said, are inflationary pressures, which have risen globally, and tight public finances, given how much debt and public deficits have risen since the onset of pandemics
“Fiscal reforms need to be strengthened in order to guarantee the sustainability of long-term public debt. “Continuous improvement of the business environment is also essential, in order to enable the private sector to reach its potential and attract foreign investors,” Solovova said.
Solovova also spoke about the works contract for the rehabilitation of the Tirana-Durrës railway line and the new connection with Rinas Airport signed in March 2021. According to her, the contractor is finalizing the detailed engineering project and the current works will begin as soon as the requirements of the Environmental and Social Plan are met.
Asked about the sectors where the Albanian economy should focus in the future, Solovova recommended further steps towards the diversification of renewable energy sources.
“The rapid digitization of the economy – and I’m not just talking about e-government (which is very important) but also the digitization of private businesses, starting with payments, digital banking, reducing the cash economy, investing in broadband infrastructure – these are important to ensure Albania’s integration into the knowledge-based economy, which ultimately needs to attract foreign investment and keep talent in the country,” she said.
/sm/
