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The Albanian economy experienced strong growth during the year we left behind, despite the price crisis. According to the latest report by the World Bank for the region, during the year 2022, Albania's economy continued to recover, reaching a growth rate of 4.84%. Albania ranks second in the region for economic growth, behind only Montenegro, Albanian state TV channel says.
It has left behind Serbia, Bosnia and Herzegovina, and Kosovo. The World Bank emphasizes that trade and construction were the sectors that led the economic growth in 2022. However, the occupation of Ukraine by Russia created problems in the pace of economic growth, as supply shocks were reflected in costs and increased uncertainty, particularly in sectors such as agriculture and production.
Despite the high inflation rate, which reached 8.3% in October, the highest recorded in recent decades, the World Bank points out that inflation in Albania remains lower than in other countries, for several reasons. First, the production of electricity from hydropower plants, which although could not fully meet up to 85% of domestic energy demand, still provided protection against the ongoing energy crisis. This way, the increase in energy prices for businesses and families was slowed down.
Also, the exchange rate of the local currency against the euro continued to appreciate (by 4.9% in December), thus slowing down the transmission of imported inflation into the domestic economy.