Bi-Weekly Report 6 – 19 October 2020


External imbalances widened markedly, amid the COVID-19 crisis, with the 12-month rolling current account deficit hitting a 2-year high of 3.3% of GDP in August

The capital and financial account remained weak, putting pressure on FX reserves

A weak external position poses serious challenges to monetary policy



Albania is expected to start EU accession negotiations by end-year

COVID-19 and (to a much lesser extent) the impact of the end- 2019 earthquake pushed down GDP contraction to double digits in Q2:20

The annual pace of GDP contraction is set to ease markedly in H2:20, although a second COVID-19 wave poses significant downside risks



In light of subdued inflation, the CBE cut further its key rate by 50 bps to 8.75%

GDP growth decelerated to 3.5% in FY:19/20 from 5.6% in FY:18/19, as COVID-19 took its toll

With limited help from fiscal policy, GDP growth should weaken in FY:20/21, but remain positive



Bi-Weekly Report 6 – 19 October 2020

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