TIRANA, Jan. 17, 2023 – Albania is likely to escape a recession in 2023, but growth will remain anemic at 2.2 percent, the World Bank has announced, lowering a 7-month old projection for a 3.5 percent growth in GDP.
By those numbers 2023 is seen as a bad year, since Albania grew by 3.5 percent in 2022 — helped by pent up demand for tourism and a construction boom. The World Bank also forecasts a better 2024, with Albania’s economic growth expected to pick up at 3.4 percent.
The Western Balkans’ economy as a whole won’t do much better than Albania, as it is predicted to grow at 2.5 percent in 2023, following an estimated 3.1 percent regional economic growth in 2022.
Europe fares particularly badly in the World Bank’s half-yearly report on the global economy, which warns the world will get close to a second recession in three years as a trifecta of high inflation, interest rates and war drag down economic growth for 2023.
The global forecast was cut down from 2.9 perfect to 1.7 percent, according to the World Bank’s latest Global Economic Prospects report.
“Given fragile economic conditions, any new adverse development — such as higher-than-expected inflation, abrupt rises in interest rates to contain it, a resurgence of the COVID-19 pandemic, or escalating geopolitical tensions — could push the global economy into recession. This would mark the first time in more than 80 years that two global recessions have occurred within the same decade,” it said in a statement.
Rich EU countries will not perform well, and it could affect Albania, as it does much of its trade with the Eurozone. In 2023, euro-area growth is expected at zero percent — a downward revision of 1.9 percentage points.
Growth in other advanced economies is projected to slow from 2.5 percent in 2022 to 0.5 percent in 2023. Over the past two decades, slowdowns of this scale have foreshadowed a global recession. In the United States, growth is forecast to fall to 0.5 percent in 2023 — 1.9 percentage points below previous forecasts and the weakest performance outside of official recessions since 1970. In China, growth is projected at 4.3 percent in 2023 — 0.9 percentage point below previous forecasts.
“Subdued investment is a serious concern because it is associated with weak productivity and trade and dampens overall economic prospects. Without strong and sustained investment growth, it is simply impossible to make meaningful progress in achieving broader development and climate-related goals,” said Ayhan Kose, Director of the World Bank’s Prospects Group. “National policies to boost investment growth need to be tailored to country circumstances but they always start with establishing sound fiscal and monetary policy frameworks and undertaking comprehensive reforms in the investment climate.”
