This report covers the main macroeconomic releases from April 8 to May 7 2014 as well as the financial and political events that took place in Albania during this period.

A few months after the International Monetary Fund (IMF) agreed to provide Albania with a EUR 331mn credit to support the authorities’ reform programme, the fund released a new forecast in April confirming expectations that the country’s economic growth should speed up to 2.1% in 2014 form 0.7% in 2013. The growth is expected to further strengthen to 3.3% in 2015. The IMF’s 2014 GDP projection is in line with the forecasts of the Albanian government and the World Bank.

In the meantime, Standard & Poor’s affirmed Albania’s B/B long- and short-term sovereign credit ratings and revised the outlook to stable from negative citing reduced financing pressure. The revision of the outlook reflects S&P’s view that the recently signed agreement with the IMF will serve as a policy anchor for fiscal consolidation and support the sustainability of Albania's high government debt.

According to the latest data from the finance ministry, Albania’s general government debt, including state guarantees, increased by 1.4% on the quarter to ALL 897.8bn (EUR 6.41bn) at end-March 2014 equalling to 64.4% of the projected full-year GDP.

Key Points

• Albania's economy expanded by 1.1% year on year in non-adjusted terms in the fourth quarter of 2013, improving from a 2.5% annual contraction in the previous quarter. The seasonally-adjusted figures showed a 2.3% quarter on quarter increase in Q4, following a 2.1% quarter on quarter drop in Q3

• Consumer prices in the country grew by 2.2% year on year in March, quickening from a 1.9% rise in the previous month with the overall trend again determined by food prices.