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Albania Country Report - Issue 3, 2014

  • ID: 2788553
  • April 2014
  • Region: Albania
  • 24 Pages
  • Emerging Markets Direct
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This report covers the main macroeconomic releases from March 5 to April 7, 2014 as well as the financial and political events that took place in Albania during this period.

A month after the International Monetary Fund (IMF) agreed to provide Albania with a EUR 331mn credit to support the authorities’ reform programme, the fund said that the country’s economy is showing signs of protracted weakness and widening macroeconomic imbalances. Weak investor confidence, bank risk aversion, as well as incomplete investment climate reforms, have amplified the slowdown, the IMF said. The fund estimates Albania’s GDP grew by just 0.7% in 2013 and sees the growth strengthening to 2.1% in 2014.

The IMF’s 2014 GDP growth estimate for Albania is in line with the latest forecast by Austria’s Raiffeisen International that sees the GDP up by a real 2%, speeding up from a 1.3% increase in 2013. Raiffeisen sees the country’s general budget deficit at 6.6% of GDP in 2014, widening from 6% of GDP in 2013. In the first two months of 2014 the budget deficit narrowed by 82.3% and equalled to 0.1% of the projected full-year GDP.

The country’s gross READ MORE >

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I. EXECUTIVE SUMMARY

II. MACROECONOMIC OVERVIEW
- Raiffeisen keeps Albania’s 2014 GDP growth forecast at 2%
- IMF says Albania's economy shows signs of protracted weakness, widening macroeconomic imbalances
- Albania expects USD 200mn financing from World Bank in May – finance minister
- Central bank keeps key rate at record-low of 2.75%

III. REAL SECTOR
1. Inflation
- CPI inflation speeds up to 1.9% y/y in February 2014
- Producer price index edges up 0.1% y/y in Q4 2013
2. Labour market
- Unemployment rate rises 2.6pps y/y to 17% in Q4 2013
3. Industry and trade
- Industrial sales rise 3.3% y/y in Q4 2013
- Retail sales growth eases to 0.5% y/y in Q4 2013

IV. FISCAL SECTOR
- General budget deficit narrows 82.3% y/y in Jan-Feb 201

V. FINANCIAL SECTOR
- Bank assets assets rise 5.4% y/y at end-January 2014
- Insurers’ gross premiums rise 29.1% in Jan-Feb 2014
- IMF sees increased vulnerability to shocks of Albanian banking sector

VI. EXTERNAL SECTOR
- Balance of payments
- Foreign trade gap widens 6.8% y/y in Jan-Feb 2014
- Foreign debt edges up 0.5% q/q in Q4 2013
- Current account deficit widens 5% y/y in 2013

VII. PRIVATISATION AND INDUSTRY NEWS
- Arian Resources raises USD 2.8mn in private placement to fund Albanian operations
- Albania plans ambitious reforms in energy sector
- Albania wants Petromanas to pay USD 5.4mn compensations for operations delay

VIII. POLITICS
- EU encourages further reforms in Albania

List of Tables

Table 1 CPI
Table 2 Producer price index
Table 3 Retail sales
Table 4 Budget balance
Table 5 Insurance premiums
Table 6 Foreign trade
Table 7 Current account

List of Figures

Figure 1 Yields on two-year bonds
Figure 2 CPI
Figure 3 Bank assets
Figure 4 Bank loans
Figure 5 Foreign trade

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