The Agency assesses that the economic recovery was strong, broad-based and different from what was initially anticipated, with an increase of 8.9% in 2021, while Gross Domestic Product reached the pre- pandemic level in the second quarter of 2021. Among the factors that underpinned the growth, according to the agency, has been fiscal and monetary policy.

The Agency expects GDP growth to be steady in the future, with 4.5% in 2022 and 4.0% in 2023, bolstered by further recovery in the tourism sector, as well as stable domestic demand.

The agency estimates that the government debt burden, after growing significantly, reaching a peak of 77.6% of GDP in 2020, slightly decreased to 77.5% of GDP in 2021 and will pursue its downward trajectory in the period 2022 – 2023. Fiscal deficit and public debt to GDP are projected to decline gradually. The Agency forecasts the narrowing of the fiscal deficit to 4.6% of GDP in 2022 and 3.5% of GDP in 2023, while it predicts that public debt to GDP will pursue the downward trajectory in 2022 and 2023, down to 75.7% and 74.7% respectively.

The agency predicts that consumer price inflation will remain above 3% in the first half of 2022 and then drop to 2.5% at the end of the year.

The Agency also expects banking sector and government liquidity risk to remain subdued and the current account deficit to continue to narrow to 5.6% of GDP in 2023, from 8.8% of GDP in 2020.

The stable outlook is also underpinned by continuation of policies, especially in the context of reforms as part of EU accession process, as well as external balances at moderate levels.
The agency estimates that the main negative risk for our economic outlook may come from pandemic developments as well as the relatively low rate of vaccination. Also a protracted Russia-Ukraine conflict would pose an additional risk to the agency’s forecasts, as higher energy prices and / or weakened business and consumer confidence could have a negative impact on the domestic economy.

However, the agency estimates that Albania’s exposure to Russia, in terms of energy or trade interdependence, and also to trade disruptions remains low, as exports of goods to Russia and Ukraine accounted for 0.01% and 0.14% of total exports in 2020, respectively.
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