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| Joint press conference with the Head of Mission of the IMF, the Bank of Albania and the Minister of Finance and Economy |
Albania's economy has exhibited a positive performance with economic growth being predominantly led by tourism and construction sectors, surpassing early-year expectations.
Public debt is stabilizing, and inflation is following suit, noted Anke Weber, the head of the IMF Mission for Albania, during a press conference held upon the mission's conclusion in Albania.
It is expected that economic growth this year will reach 3.5%, but there has been a call for a more robust management of public investments. The focus is on allocating funds to productive projects. It is imperative to continue working towards reducing the fiscal risk of concession contracts and state-owned enterprises, she added.
The IMF emphasized that the return to positive levels of the primary surplus in 2024 is a favorable development that will aid fiscal policy sustainability.
Further reduction of inflation is considered critical, particularly for safeguarding vulnerable households. The IMF supports the aim of the Bank of Albania to proceed with monetary policy normalization and further lowering of inflation.
A sound medium-term revenue strategy should anchor credible fiscal consolidation and the tax reform agenda. The IMF supports Albania's recently passed income tax law, which will broaden the tax base. The timely implementation of other planned tax policy measures for revenue generation is also significant.
More revenue administration reforms, including enhancing compliance among high-net-worth individuals, would complement tax policy efforts.
Continuous progress in structural fiscal reforms will enhance financial management, investments, and risk monitoring, the IMF mission emphasized.
The IMF noted that inflation dynamics are not yet secure, despite the lek's strengthening contributing to lower prices. The Bank of Albania is encouraged to promote the increased use of the domestic currency in transactions, according to the IMF mission head.
Employment and wages have improved the financial situation of Albanian families. Inflation is decreasing compared to last year, but there is still a way to return to the target.
The banking system has performed well. The current account deficit has been improved by foreign investments and income from tourism.
Sejko said that other important indicators of macroeconomic stability have also improved, emphasizing the reduction of the current account and budget deficit, as well as the decrease in the level of foreign and public debt of the Albanian economy.
In this context, the perspective of economic developments remains positive, the Albanian economy is expected to expand further in the future, while inflation will return to the target during 2024.
The governor emphasized the need to follow careful and coordinated monetary, fiscal and financial policies.
He said that the country's economic growth will depend on structural reforms and should be anchored with European integration.
He said that the strengthening of the lek is in line with the growth of the economy that started in 2018 and is in line with the foundations.