September 29 (SeeNews) - The International Monetary Fund (IMF) said it expects Albania's economic output to decrease by 7.5% this year as a result of the coronavirus pandemic and the 2019 earthquake, more than the 5% contraction projected earlier.
Albania's economy is expected to recover from the second half of the year and grow gradually in 2021 as the pandemic's impact recedes and earthquake reconstruction works continue, the IMF said in a concluding statement at the end of a staff virtual visit to the country on Monday.
The IMF also expects Albania's fiscal deficit to increase to about 7% of the gross domestic product (GDP) and the public debt-to-GDP ratio to rise to 80% in 2020. Inflation is projected to remain low.
То mitigate the COVID-19 pandemic's effects on the economy, government support should be temporary and well-targeted, supporting essential activities and protecting the most vulnerable, the IMF said, adding that Albania needs to make strong efforts to safeguard financial stability while supporting borrowers hit by the shocks.
The IMF also highlighted the country's need for an improved tax system that is growth conducive, as higher revenue is critical for sustaining the higher spending needs of the people and the economy.
Albania has confirmed a total of 13,391 coronavirus cases, including 380 deaths, as of Monday, health ministry data shows.
A 6.3 magnitude earthquake, the worst to hit Albania in decades, left 51 people dead and around 3,000 injured on November 26.