The research institute "The Vienna Institute for International Economic Studies"(WIIW) warned Albania against the risks that private-public partnership investments could have on the country's economy in the long run, slightly diminishing optimism about the nation's GDP growth forecasts.
According to the Institute, in its new spring forecasts published this week, the value of the Albanian economy is expected to move from 3,9% of 2017 to 4,1% in 2018, thanks above all to infrastructure projects and tourism.
A slight decrease in 0,1% compared to forecasts that had been published last November. Despite this, however, the forecasts are almost in line with those made by the Albanian government, or to reach the 4,5% of value in the 2021 when the second mandate of Edi Rama expires.
|MAIN ECONOMIC INDICATORS||2015||2016||2017||2018||2019||2020|
|Population, 1000 people||2881||2876||2877||.||.||.|
|GDP, real change in%||2.2||3.4||3.9||4.1||4.0||3.9|
|GDP per capita (EUR at PPP)||8500||8500||8900||.||.||.|
|Gross industrial production, real change in%||-2.1||-16.6||4.0||.||.||.|
|Unemployment rate - LFS, in%, average||17.1||15.2||14.0||13.0||12.5||12.0|
|Average gross monthly wages, EUR||335||334||372||.||.||.|
|Consumer prices,% pa||1.9||1.3||2.0||2.8||3.0||3.0|
|Tax balance in% of GDP||-4.1||-1.8||-1.9||.||.||.|
|Public debt in% of GDP||73.1||72.4||71.0||.||.||.|
|Current balance in% of GDP||-8.6||-7.6||-8.6||-7.9||-7.5||-7.5|
|Incoming IDE, EUR mn||890||943||900||.||.||.|
|Gross foreign debt in% of GDP||74.7||73.5||67.0||.||.||.|
Optimistic forecasts that, however, do not guarantee the 100%
"The variables for our forecasts are numerous and above all downward. Our main concerns concern a potential trade war and the possibility that global central banks do not come out of their condition of 'ultra-compliant monetary policies'.
Any increase in interest rates would be quite dangerous for countries with high public debt " - he has declared Richard Grieveson, economist of WIIW.
Criticism of the one billion government project and EU membership
The ambitious € 1 billion investment project with a public-private partnership formula has been put in place under accusation by international financial institutions (including the Vienna institute), concerned about the effect it could have on public debt and on efforts to reduce the latter to 60% by 2021 (currently at 70%).
The Vienna Institute expects Albania to join the European Union by the 2025. Although in thelast strategy for the enlargement of the Western Balkans, the European Commission stated that, given the current situation, only Serbia and Montenegro could join the EU:
"There are great expectations that after five decades of isolation and three decades of involuntary exclusion, Albania will be able to enter the European Union." - declared the institute.
To make this happen, the Vienna Institute continues, Albania will have to achieve, among other things, the 3% inflation target by the 2019, and the 12% by the 2020 with regard to the rate of unemployment.
- IMF criticizes the "1 billion euro" project of the Rama government
- Starting negotiations EU membership main challenge for Albania in the 2018
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