Macroeconomic Forecast Albania

In the first eleven months of 2009, Albania's budget deficit soared to ALL64.4bn, compared to a shortfall of ALL23.4bn through the same period in 2008. We estimate the fiscal shortfall expanded to a record 7.0% of GDP in 2009, driven in large measure by a splurge in pre-election spending in H109. While we project the deficit narrowing to 4.4% of GDP in 2010, we caution that a potentially prolonged period of lower economic growth (implying weaker revenue streams) poses a key risk to our forecast going forward.

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