Nov. 2, 2010 -
PRLog -- Having been one of the only states in emerging Europe to have avoided recession throughout the global financial crisis, it is now increasingly apparent that growth throughout the Albanian economy has finally started to slow. Indeed, latest data from the Institute of Statistics shows the economy contracted 0.8% y-o-y in Q409, compared to growth of 5.3% in H109. While we forecast real GDP to expand by 3.5% in 2010, making the Western Balkan state a regional outperformer this year, we nevertheless caution that the medium-
term outlook is far from sanguine. In particular, we stress that the combination of burgeoning current account and fiscal deficits; elevated political risk; and rising uncertainty surrounding the sovereign creditworthiness of the economy's main trading partners (most notably Italy and Greece), ensure that the risks to our outlook will remain firmly to the downside for the time being. D espite increasing pressure from Brussels urging Albania's political elite to reach a compromise to end the ongoing political crisis stemming from disagreements surrounding June 2009's parliamentary election, we caution that a lasting resolution to this dispute is not yet in the offing. Parliament's ongoing paralysis will continue to hamper Tirana's efforts at pushing through legislation necessary for greater integration with the EU. As a result, we caution that the country's membership application to the bloc is unlikely to progress in 2010, regardless of Prime Minister Sali Berisha delivering the Western Balkan state's completed EU pre-accession questionnaire to Brussels in mid-April. We project Albania's current account deficit narrowing to 13.8% of GDP in 2010 (down from 15.1% in 2009), before falling to 13.2% in 2011. Strong domestic demand and well supported global commodity prices will be the key factors keeping the shortfall firmly in the red, although we caution that a potential slowdown in remittance inflows stemming from Greece's macroeconomic crisis could see this deficit widen further in the short term. In late March 2010 the OPEC Fund for International Development announced that it will provide a loan of up to US$10mn to Albania for the rehabilitation of regional and local roads. The programme will be co-financed by the World Bank, the Council of Europe Development Bank, and the European Bank for Reconstruction and Development, and aims to support the economic development of rural areas. Given the still relatively nascent stage of transportation infrastructure throughout the country, we are encouraged that this latest development will further help improve the flow of goods across the country, thereby helping to boost Albania's underlying attractiveness as a destination for foreign investment.
For more information or to purchase this report, go to:
-
http://www.fastmr.com/prod/90337_albania_business_forecas...About Business Monitor International
Business Monitor International (BMI) offers a comprehensive range of products and services designed to help senior executives, analysts and researchers assess and better manage operating risks, and exploit business opportunities, across 175 markets. BMI offers three main areas of expertise: Country Risk BMI's country risk and macroeconomic forecast portfolio includes weekly financial market reports, monthly regional Monitors, and in-depth quarterly Business Forecast Reports. Industry Analysis BMI covers a total of 17 industry verticals through a portfolio of services, including in-depth quarterly Country Forecast Reports. View more research from Business Monitor International at
http://www.fastmr.com/catalog/publishers.aspx?pubid=1010About Fast Market Research
Fast Market Research is an online aggregator and distributor of market research and business information. We represent the world's top research publishers and analysts and provide quick and easy access to the best competitive intelligence available.
For more information about these or related research reports, please visit our website at
http://www.fastmr.com or call us at 1.800.844.8156.
# # #
Fast Market Research is an online aggregator and distributor of market research and business information. We represent the world's top research publishers and analysts and provide quick and easy access to the best competitive intelligence available.
Account Phone Number