This report covers the main macroeconomic releases from March 5 to April 7, 2014 as well as the financial and political events that took place in Albania during this period.

A month after the International Monetary Fund (IMF) agreed to provide Albania with a EUR 331mn credit to support the authorities’ reform programme, the fund said that the country’s economy is showing signs of protracted weakness and widening macroeconomic imbalances. Weak investor confidence, bank risk aversion, as well as incomplete investment climate reforms, have amplified the slowdown, the IMF said. The fund estimates Albania’s GDP grew by just 0.7% in 2013 and sees the growth strengthening to 2.1% in 2014.

The IMF’s 2014 GDP growth estimate for Albania is in line with the latest forecast by Austria’s Raiffeisen International that sees the GDP up by a real 2%, speeding up from a 1.3% increase in 2013. Raiffeisen sees the country’s general budget deficit at 6.6% of GDP in 2014, widening from 6% of GDP in 2013. In the first two months of 2014 the budget deficit narrowed by 82.3% and equalled to 0.1% of the projected full-year GDP.

The country’s gross external debt edged up by 0.5% quarter on quarter to EUR 5.7bn as of end-2013, accounting for 58.3% of the GDP. The foreign trade gap expanded by 6.8% year on year in January-February and accounted for 2.6% of the full-year GDP forecast. The current account gap also widened – by 5% year on year to 10.7% of the GDP.

Consumer prices inflation in the country quickened to 1.9% in February from 1.7% in January with the overall trend was again determined by food prices, which grew 2.9% year on year accelerating from 2.7% the month before. Producer prices picked up by 0.1% year on year in Q4, the same as in the previous three months.