Tirana, 11 November 2015/Independent Balkan News Agency
An International Monetary Fund (IMF) team visited Tirana from October 28 to November 10, 2015 to conduct discussions on the fifth and sixth reviews of Albania’s Extended Fund Facility (EFF) arrangement. On the conclusion of the visit, the IMF representative, Ms. AntidaTuladhar commented on Albania’s economic performance.
“Economic recovery is expected to continue, with GDP growth reaching 2.5 – 2.75 percent in 2015 and between 3 – 3.5 percent in 2016. Growth will be driven by continued foreign direct investment and rising domestic demand, supported by a gradual pickup in bank lending. Inflation is expected to stay low, around 2 percent, in part reflecting globally low price pressures and output still below potential”, Thuladar said.
According to Thuladar, “fiscal consolidation is expected to continue in 2016 with the budget aiming for a primary surplus of 0.3 percent of GDP, designed to allow sufficient room for growth-supporting capital investment while enabling public debt to gradually decline over time. The country needs to continue improving tax compliance and broadening the tax base to sustain fiscal consolidation, and ensure medium-term debt sustainability, while allowing fiscal space for productive spending.”
The IMF representative says that “Bank of Albania’s monetary policy should continue to be supportive of economic recovery, consistent with its mandate of maintaining price stability. Lending to the private sector is gradually recovering but credit growth remains low, affected by high non-performing loans (NPLs) and weaknesses in contract enforcement. The government and Bank of Albania have adopted a comprehensive strategy for resolving the NPL issue, focusing on legal and administrative changes. The banking sector remains highly liquid and well capitalized and has weathered the Greek crisis well.” /ibna/