IMF deal comes under scrutiny as opposition accuses the government of bowing to unfavourable terms in order to obtain the funding.
TIRANA, April 4 – Albania’s main opposition Democratic Party has continued to express concern regarding an agreement between the Socialist-led government of Prime Minister Edi Rama and the International Monetary Fund, which the opposition says is unfavorable for Albania and will hurt the government’s ability to manage the country’s economy.
Former Finance Minister Ridvan Bode accused the government for failing to achieve any results and of bowing to IMF demands when it signed a deal. Bode made the comments in a parliamentary commission meeting this week.
Finance Minister Shkelqim Cani responded that the government had been forced into the deal by the previous mismanagement of the Democrats with then-Prime Minister Sali Berisha having increased the public debt to dangerous levels of more than 70 percent. He added the Democrats, now in opposition, had failed to manage the country’s money well, leaving a huge debt unpaid to the private companies.
The Democrats accuse the Socialists that they are taking the country’s economy toward a deep crisis, echoing similar accusations the Socialists had made when they were in opposition.
The new government, in power since September last year, has pledged to pay this year $350 million in arrears, which is half of the total amount the Albanian state owes to private businesses.
The payment was made possible after Tirana signed a deal with the IMF to get a $450 million loan that may be followed with another $200 million loan from the World Bank.
The Socialist-led government says that the debt has been accumulated since 2005 when the former government of Democrats came to power.
Cani has said that the repayment of the arrears would be held in three months with payments of $35 million dollars each week, starting in April. The remaining 370 million dollars would be paid in the following years.
Albania is also negotiating a $69 million loan with the European Commission, hoping that all the liquidity injection in the economy will boost economic growth.
The government is expecting a 2.1 percent growth this year, from 0.7 percent in 2013, the lowest in more than a decade.
“The Bank of Albania Supervisory Council assesses that inflationary pressure continues to remain low and, in turn, the monetary policy will support the country’s economy,” Ardian Fullani, the central bank governor, said last week.
The annual inflation rate in February was 1.9 percent with a slight increase versus the previous month.
The governor said the central bank expects a gradual recovery of the country’s economy, but it would continue to be below potential.
