November 11 (SeeNews) - The European Commission (EC) said on Thursday it expects Albania's economy to rebound to 6.9% growth in 2021, lifting its May forecast by 2.9 percentage points.
"A faster-than-expected economic recovery is driven by a strong rebound of tourism from neighbouring countries, as well as high investment growth and a recovery of private consumption," the Commission said in its Autumn 2021 Economic Forecast report.
Albania's gross domestic product (GDP) fell by 4% last year.
The Commission sees Albania's economy growing by 3.7% in 2022 and 3.6% in 2023.
The general government deficit is expected to decline to 5.9% of GDP in 2021 and 4% of GDP in 2022, from last year's 6.8%.
Private consumption is seen rising by 4.5% in 2021 and 3.5% in 2022, after shrinking 2.4% last year. At the same time, public consumption growth is forecast at 2.5% in 2021 and 2.1% in 2022, compared with 1.6% growth in 2020.
Inflation is forecast to accelerate to 2.2% in 2021 and 2.8% in 2022, from 1.6% in 2020, before slightly slowing down to 2.7% in 2023.
"Adding to the strong, but partly transitional price increases for food and transport, more persistent upward pressure from wage growth is forecast to drive the inflation rate towards the central bank’s 3% inflation target in 2023, when the very accommodative monetary policy stance is expected to begin a gradual normalisation," the Commission said.
For the whole EU, the Commission is projecting an economic growth of 5% in 2021, to be followed by 4.3% expansion in 2022 and 2.5% growth in 2023.
The European Council granted the status of a EU candidate country to Albania in 2014.