Economic Growth Created More Jobs in Albania, sustaining growth requires staying the course of reform

Economic Growth Created More Jobs in Albania, sustaining growth requires staying the course of reform

The World Bank has presented its latest economic regional report on Western Balkan countries. In the part concerning Albania, the report states that “Economic growth in Albania is expected to be 4 percent this year, creating more jobs, according to the latest Western Balkans Regular Economic Report, Higher but Fragile Growth. Employment growth is helping to reduce poverty in the country, and fiscal deficit and public debt are expected to decline”.

Meanwhile, as far as growth is concerned, the report stresses that “growth for the Western Balkan region is estimated to strengthen to 3.5 percent for 2018, according to the Report. Albania, Bosnia and Herzegovina, Kosovo, FYR Macedonia, Montenegro, and Serbia are estimated to grow at rates between 2.5 percent and 4 percent”.

According to the report, “while employment also rose in five of the six countries in the region, the 91,400 new jobs created between July 2017 and July 2018 were significantly fewer than the 214,000 added one year earlier. Most new jobs are appearing in the industry and services sectors”.

“Across the region we are seeing growth supported by public investment and spending,” says Linda Van Gelder, World Bank Regional Director for the Western Balkans. “Countries that saw their private investment increase also saw faster growth. Although untargeted social spending and public wages have had a positive impact on growth in the short-term, they increase fiscal vulnerabilities. Increasing private investment and exports is a more sustainable way to grow.”

The World Bank also addresses the issue of rising public debt and according to this institution:

“In most Western Balkan countries, high and rising public debt is coupled with fiscal and external imbalances, making the outlook vulnerable to an increase in financing costs should financial markets tighten. Sustaining long-term growth thus requires domestic reforms that unleash private investment and exports”.

As far as the outlook for economic growth, the World Bank is optimistic:

“The economic growth outlook of Albania remains positive. However, despite welcome evidence of increased growth and job creation, fiscal consolidation, more efficient public spending, and structural reforms are critical to sustainable and equitable growth”.