October 12 (SeeNews) - The International Monetary Fund (IMF) expects Albania's economy to rebound to 7.8% growth in 2021 after last year's contraction of 4%, it said.
Albania's economic recovery is stimulated by continued monetary and fiscal policy support, reconstruction, reduction in movement restrictions, strong electricity production due to favorable weather conditions so far, and a relatively good tourism season, the global lender said in a staff concluding statement following the 2021 Article IV mission.
In 2022, Albania's gross domestic product (GDP) is expected to grow by 3.8% as policy support decreases and the recovery cycle matures, the IMF added.
"The emergence of vaccine-resistant variants at the global level or localized outbreaks in Albania as well as potentially tighter global financial conditions and elevated global energy prices represent major downside risks to the economic outlook. A faster normalization from the pandemic presents an upside risk," the statement reads.
The fiscal deficit is seen standing at 4.6% of GDP, while general government debt is forecast to reach nearly 80% of GDP by the end of the year.
The global lender expects the recent rise in headline inflation, as a result of higher food and energy prices, to be transitory.
However, Albania needs to do more to strengthen the rule of law, reduce vulnerabilities to corruption and boost competitiveness in order to support the realisation of its long-term development goals and aspirations, the IMF noted.