TIRANA (Albania), November 21 (SeeNews) – Much remains to be done to make Albania’s economic growth more sustainable and inclusive, and to reduce the appeal of emigration, the International Monetary Fund (IMF) said.
“Albania’s economic growth has trended upward in recent years, as the country has benefitted from the implementation of reforms and from the economic expansion of its European trade partners,” the IMF said in a press release late on Tuesday, after the conclusion of a two-week visit within the framework of the first Post-Program Monitoring (PPM) mission.
IMF also urged the government to focus on key reforms such as strengthening the rule of law and economic institutions, removing obstacles to higher private savings and investment, and reducing public debt at a faster pace by enhancing the management of public investments and broadening the revenue base.
“It is also important to build stronger buffers, especially now that risks to Europe’s economic outlook have increased,” the IMF added.
The rapid increase in public-private partnerships (PPPs) has raised fiscal risks, calling for additional improvements in the public investment framework, the IMF mission noted.
“In addition, safeguarding financial stability within the changing architecture of the banking sector increases the complexity of financial supervision,” the IMF said, adding that progress on these fronts should also help Albania in its pursuit of further integration with the European Union.
According to the IMF team, Albania is strongly exposed to the increasing risks to growth in Europe, including in its main trading partners.
“A downturn in these countries could spill over through lower exports, remittances, and foreign direct investment (FDI)," the Fund said. “A temporary push from electricity generation owing to favorable weather conditions is expected to boost growth to 4% this year, and to dampen it somewhat in 2019, to 3.7%.”