Vienna Institute: Albania's economy expands by 3% in 2023

The Vienna Institute for International Economic Studies (WIIW) predicts that Albania's economy will grow by 3% this year.

This is the lowest growth rate for the period 2021-2025. The Vienna Institute's forecasts are more optimistic for 2024, where growth rates are expected to be 3.6% and 3.8% in 2025.

Experts from Vienna claimed that despite the difficulties created by the War in Ukraine, Europe and the countries of the Western Balkans showed resilience.

Richard Grieveson, Deputy Director of the WIIW, and lead author of the Outlook report, said that "Putin's strategy of using energy as a weapon has failed."

For 2023, WIIW predicts average growth of 1% for EU member states. The South-East European countries that are members of the EU, in particular, are showing themselves to be quite resilient. In the Visegrad countries, the average growth will be only 0.6%, while the Hungarian economy is expected to shrink this year by -1%.

The economies of the Western Balkans will expand by only 1.8%, while that of Turkey will grow by 3%. Although growth will be lower than last year, recession will be avoided by most countries with the exception of Hungary and Russia, whose economies will contract this year.

Grieveson says the biggest factor of uncertainty remains the war in Ukraine. Inflation in the Region has passed its peak, but will remain high. The central banks in the Region may somewhat loosen the monetary policy, which would positively affect growth.

After a 30% drop in GDP last year, war-torn Ukraine should recover somewhat this year by (3%). In the midst of great economic destruction and human losses, this increase would be only a small step forward.

Moreover, this prediction involves great uncertainties and depends, above all, on the future course of the war. Russia's bombing campaign against the country has already destroyed large parts of the infrastructure and continues to destroy.

Russia's economy in 2023, GDP is expected to decline by 3%. In addition to the military mobilization and the lack of gas exports to Europe, they are negatively affecting the Russian economy.

The EU oil embargo and the price cap on Russian oil have meant that Russia is now selling its oil cheaply. In the first four weeks after the measures came into effect, the price of Russian crude fell to $47 a barrel.

The sanctions were imposed on December 5, but Vasily Astrov, a Russia expert at Wiiw, believes they will have little impact on Putin's ability to finance the war for now./Monitor