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Economic growth in Albania will continue strong. This is confirmed by the prestigious agency “Moody’s” in the latest assessment of the country’s finances, giving it a B + rating.
Our economy will remain stable, the agency describes, and economic growth in the next two years will be fixed at 4.5% and 4%, after a strong recovery in 2021. Tourism and domestic demand will be the factors that will drive this growth. Confirmation comes between the Russia-Ukraine conflict and the ongoing price crisis in Europe.
But the economy is experiencing a moment of rising prices, which does not come as a result of the war in Ukraine, but from the inflation that has gone beyond the target of the Bank of Albania. The good news according to the rating agency Moody’s is that inflation is expected to decrease at the end of 2022. However, a slight tightening of monetary policy is expected from the Bank of Albania, which may increase interest rates, which today are fixed at a record high of decreases by 0.5 percent.
Given the revenue the government says it will raise this year, the country’s public debt is also expected to improve, reaching a record high during the first year of the pandemic at 77.6%. according to the agency “Moody” the debt is expected to fall to 74.7% in 2023. The electoral promise of the government is that within this mandate will send the debt to 60%.
As the only risk to the stability of the economy, Moody’s assesses the low rate of vaccination, but also the effects of the prolongation of the Ukraine-Russia conflict that will massively affect the European continent, and consequently Albania.
According to the Bank of Albania, our economy has low exposure to the conflict. This comes from several indicators. Our foreign exchange reserves consist of euros and dollars, which are maintaining their value. Banks have achieved record values in deposits and financial markets also remain stable. This is also shown in the value of treasury bills which has not changed, despite a moderate increase in inflation.
The confrontation of the economic situation in the country between the Bank of Albania and the Ministry of Finance took place five days after the start of the war between Russia and Ukraine, but our trade relations with these two countries in conflict are modest.
According to the figures, our country to these two countries sends goods at very low values, which in relation to total exports stand at 0.01% and 0.14%, mainly fruits and vegetables.
In terms of imports, from Russia the country receives three main products which are cereals, fuels, mainly fuels, and vegetable oils.
Meanwhile from Ukraine we get mainly cereals and vegetable oils. The trade volume with these two countries is 3%, while European countries occupy 60% with Italy, Greece and Germany as main partners.
Top Channel communicated with the Serbian Chamber of Commerce and Industry, and according to her there is no expected ban on exports from this country as Serbia enjoys large surpluses in wheat reserves. Even in the case of setting export quotas from Serbia to other countries, it seems that the integration process of the three Western Balkan countries suddenly comes to the rescue. The Serbian Chamber of Commerce says in communication with Top Channel that it will lobby for the “Open Balkan” countries to remain outside this rule. But in the meantime, Albanian traders have begun to look to other countries such as Hungary and Bulgaria.
Our country is not expected to have a supply crisis in terms of flour, but the price is expected to rise, as international markets have increased demand after the cessation of exports from Russia and Ukraine.
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