TIRANA, Feb. 14 – Improvements in infrastructure, the business environment and rule of law will boost Albania’s growth potential, a senior International Monetary Fund official said during a visit to Albania this week.
Speaking after concluding his Albania visit, Tao Zhang, the IMF deputy managing director, stressed the need for the Balkan country to press ahead with reforms and take advantage of the favorable external environment in Europe, where Albania’s main trading partners Italy and Greece have escaped their recessions.
“In my discussions with the [Albanian] authorities, I emphasized that this is the moment to accelerate reforms. The global economy is in an upswing. This includes Europe, where inflation and interest rates remain low. However, such favorable external conditions are not going to last forever. So now is the time to press ahead with reforms and build up stronger economic and financial defenses,” Zhang said, noting the progress Albania has made in reducing poverty, maintaining stability and developing the economy.
“I also discussed with authorities policies to boost Albania’s growth potential. These include improvements in infrastructure, education, and business environment, especially the rule of law. Reducing public debt is an important goal that can be achieved by strengthening public expenditure management and the tax system,” added the senior IMF official.
In a meeting with Finance Minister Arben Ahmetaj, the IMF official offered assistance to curb potential risks stemming from the much rumored public private partnerships which IMF has warned could further increase public debt, currently at about 70 percent of the GDP.
The Washington-based lender of last resort expects the Albanian economy to slow down to 3.7 percent in 2018, down from an expected 3.9 percent in 2017 as the TAP and Devoll Hydropower project reduce their FDI contribution by an estimated €180 million in 2018 alone and by €360 million in 2019.
The Albanian government’s growth expectation for 2018 is at 4.2 percent, 0.5 percent higher than the IMF and 0.7 percent more optimistic compared to the World Bank’s forecast.
