Again, interest rate expectations, our usual suspects, meddle with FX markets. Dovish ECB and hawkish Fed repricings affect EUR/USD, while the dovish stance also causes appreciation pressure for the Swiss franc. The current geopolitical environment adds complexity and represents the icing on the cake. This global sentiment weighs on CE-3 currencies, with EUR/HUF temporarily testing levels above 400. In Russia, homemade problems provide a headwind for USD/RUB, sending the rouble on a depreciation path. To end this summary on a positive note, the Albanian lek, in contrast, shows strength supported by robust fundamentals. This issue features
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Albania’s economy surged by 4.1% yoy in H2 2024, fueled by construction and tourism. Despite export challenges, domestic demand thrived. Revised GDP data showed better-than-expected growth, with real GDP at 3.9% for 2023. This strong performance boosted the 2024 GDP forecast to 4.0%, positioning Albania for a promising economic future. Continued success hinges on robust demand, rising investments, and alignment with EU standards. |
Given the remarkable momentum of Kosovo’s economy in the first half of the year and our optimistic outlook for the remainder, we are revising our 2024 forecast upwards. Originally projected at 3.9%, we now anticipate the GDP will grow by 4.7% in 2024. This upward revision is driven by robust household consumption, increased investment activity, and a surge in exports of goods and services, all of which underscore the country’s economic vitality. |
The Kosovo government’s unilateral move to close nine Serbian Post branches and open the Ibar Bridge has drawn serious backlash. Prime Minister Albin Kurti’s administration claims these steps aim to assert control over northern Kosovo, which has a significant ethnic Serb population. Serbia, however, sees this as a direct attack on Serb autonomy, disrupting vital services and potentially inciting unrest. With criticism from the EU and the U.S. and looming threats of sanctions, can Kosovo navigate this contentious path without further destabilising the region? |
GDP grew by 3.6%yoy, led by construction & services. Albanians are also feeling confident, with household spending rising on wage increases and easier access to credit. We see this trend continuing into 2024, with tourism & public investment fueling growth. Stay tuned for our Q2 update for a closer look at how these trends are unfolding! |