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The Ukraine-Russia war has increased the risks for the Albanian economy and will slow down its growth rates.
Finally, it is the World Bank that has devalued the projections for economic growth to 3.2% from the 3.8% it had forecast at the beginning of this year, approaching the expectations of other domestic and foreign institutions.
The European Bank for Reconstruction and Development goes in the same line with the same projection, while the Albanian government itself is more optimistic and expects the economy to expand from 3.2 to 3.5%. The most conservative is the central bank according to which in the most negative scenario economic growth does not exceed 3%.
In the spring report, the World Bank notes that the escalation of the war will further increase energy and food commodity prices that are expected to keep inflation at 5%. According to her, the purchasing power will shrink significantly, while the new Covid-19 variants are an additional risk for the economy.
The war in Ukraine could further increase inflation, disrupt supply chains and disrupt financial markets. All these can dilute the growth prospects of Albania, writes BB.
In such conditions, when even the budget is in difficulty after successive shocks, the international financial institution emphasizes that the government can cut spending to prevent an increase in public debt, but adds that the energy crisis will require additional funding to guarantee supply. with energy and to support the needy.
In this report as well, the bank appeals for caution with the level of public debt, as it highlights as a basic priority the need to collect as much revenue as possible through the medium-term strategy that the government is undertaking with the assistance of the International Monetary Fund. Although, its effects may take time, given that Finance has announced it will delay consulting on new tax changes until the price crisis is overcome.
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