Albania in 2020, according to WB – Private consumption and declining government spending, rising inflation and agriculture

At the end of last week, the World Bank published the extended periodic report on Europe and Central Asia with the latest projections, which for our country speak of an economic decline of 1.4% this year, which translates into recession. But the World Bank report also talks about certain sectors as well as various indicators, which illustrate a clearer picture of the Albanian economy in 2020.

Not all of these indicators are necessarily negative. In terms of the economy as a whole, the economic downturn will be led by (1) services, contracted by 2.8% in annual terms. But (2) agriculture is projected to grow by an even bigger step than last year, by 1.2%. The same goes for industry. (3) Since the fall of a year ago to 0.4%, this year is projected to stagnate. One of the reasons why the economy is projected to decline this year is (4) precisely private consumption, which is projected to be declining by 1.4% compared to 2019.

This decline in private consumption does not appear to have a negative impact on the inflation rate, (5) which is expected to gradually target the Bank of Albania, without exceeding it. Even (6) government spending is projected to decline slightly, according to the World Bank report. (7) The decline, meanwhile, will be drastic for imports and exports, with the latter being hit hardest.

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