Albania’s slower growth in 2009, says IMF

TIRANA, Feb. 9 – The International Monetary Fund predicts lower economic growth for Albania this year.
In an interview to the Voice of Albania, Albanian section, Gerwin Bell, director of the IMF program for Albania, said that their prediction of 3.5-4 percent for this year would be slower, though that is harshly opposed by Tirana’s government.
Bell said that the speed of the deterioration in the global economic crisis is expected to bring a greater reduction of economic growth in Albania.
It was only last November that Bell said Albania’s 2009 growth would be 3.5-4 percent. He said that now they would further lower that figure “because the world economy has deteriorated so much in recent months.”
Reduction of income by migrants and the reduction of exports are some of the effects for Albania.
On the other hand, insufficient crediting of economy could bring even more problems.
Less crediting and a reduction of the economic activity could bring further reduction of tax collection _ two issues considered by the IMF as risks for Albania.
The IMF justified the delay on the part of the central bank of Albania to cut the interest rate from 6.25 percent to 5.75 percent with the expectation to restore normalcy in the financial system.
Bell said they were not sure if that cut would be enough, adding that “We’ll have to wait.”
Bell believes that the monetary policy will be the only instrument with which the government is expected to act on the effects of the crisis since it cannot afford a stimulation of the economy through cutting taxes.
Bell said that Tirana had no more room for tax cuts.
The IMF continued to be critical of the management of cash and warned against a subsidy for the electricity supply at a time when other income taxes are low and when the costs will be stricter than in the past.
He urged the government to better collect the money from the consumers and warned that the “wholesale rates are very low compared to the cost,” continuing to urge a further price increase.
Following the end of its last mission and assistance in Albania, the IMF’s current relations with Albania are limited to counseling.
Bell said it was impossible to make a correct forecast but urged the Tirana government to continue its good economic policy “to ensure the stability of the financial system.”
“This is not a global crisis that can be resolved in Albania, but Albania can do its best to maintain stability.”