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Albania: Staff Concluding Statement of the First Post-Program Monitoring Mission

Albania: Staff Concluding Statement of the First Post-Program Monitoring Mission

An International Monetary Fund (IMF) mission, led by Ms. Anita Tuladhar, visited Tirana during March 7-20, 2018, for the first Post-Program Monitoring (PPM) discussions. The PPM process is intended for member countries that have substantial IMF credit outstanding following the expiration of their programs, and is especially focused on vulnerabilities and risks. At the end of the visit, the mission issued the following statement:

Albania is enjoying one of the fastest economic growth rates in the region. The macroeconomic and political environment is stable. Policymakers should use these good times to push for reforms to mitigate risks arising from high public debt and contingent liabilities, and non-performing loans in the financial sector; and to strengthen medium term growth potential against a difficult investment climate with high informality and weak rule of law. Key priorities are: advancing fiscal consolidation; enhancing the efficiency of public investment spending; strengthening the institutional framework for bank supervision and Non-Performing Loans (NPLs) resolution; and removing bottlenecks in business/investment environment through judicial and anti-corruption reforms. These efforts will also open the economy to new growth opportunities, help bring Albania closer to European Union (EU) integration and ensure higher standards of living for the Albanian population.

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Economic growth remains strong

Albania is enjoying one of the fastest economic growth rates in the region with GDP growth projected to reach an estimated 3.9 percent in 2017 and 3.7 percent in 2018. Financing conditions are extremely favorable as inflation and interest rates remain very low. Investment is picking up and confidence remains high. Exports are rising, supported by the strong economic recovery in EU trading partners. The foreign exchange reserves of the Bank of Albania (BoA) are comfortable (at more than 6 months of import coverage) as flows of foreign direct investment continue at a robust pace. While the recovery remains creditless, the banking sector is stable, liquid, and profitable. Albania’s growth outlook remains positive, provided the reform momentum picks up, improving confidence and creating a favorable environment for new investment and growth.

News Source: International Monetary Fund

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