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IMF: The Albanian economy has positive growth, but there are significant challenges ahead

2024-11-21 19:30:32, Kosova & Bota CNA

IMF: The Albanian economy has positive growth, but there are significant

In Albania, at the end of talks with the authorities over the last 10 days, the mission of the International Monetary Fund positively evaluated the progress of the Albanian economy.

According to the head of the mission, Anke Weber, " the performance has returned strong, supported by prudent macroeconomic policies. Production is now well above its pre-pandemic trend thanks to a booming tourism sector. Prudent fiscal policies contributed to a significant reduction in public debt, while proactive monetary policy, the decline in global commodity prices and the appreciation of the lek have eased disinflation ," stated Mrs. Weber.

The Monetary Fund predicts " a real GDP growth of 3.6 percent in Albania this year, among the highest in Europe. Growth in the medium term is expected to remain stable at around 3½ percent, while risks to the outlook are broadly balanced .

The mission assessed the increase in production and the reduction of public debt. However, according to the Monetary Fund, " despite the optimistic macroeconomic picture, there are significant structural challenges ", noting the fact that the Gross Domestic Product per capita in Albania is only about a quarter of EU levels, while the country is affected by rapid aging and migration. Also, it is estimated that " despite considerable progress, deficiencies in governance constitute obstacles for the business environment ".

Regarding the financial system, the IMF mission notes that " systemic risks appear broadly contained, there are some pockets of vulnerability, including the rapid growth of credit to the real estate sector" .

According to the IMF's mission, " now is the right time to further advance reforms focused on increasing productivity by fostering integration in global value chains, removing barriers to strong growth such as distortive tax incentives, increasing access to finance and improving education and training ". The Monetary Fund assesses that " the continuation of investments in infrastructure, along with governance reforms, are the main priorities " while noting that " the successful implementation of this deep reform agenda would ensure that Albania is ready to compete in the common market, when it finally joins the EU "./ VOA