IMF worried over low public investments

“It is clear that there is an under-execution of public investments. Failure to carry out investments could be a deterrent to economic growth,” says Nadeem Ilahi, the IMF mission chief to Albania.
TIRANA, Sept. 10 – Albania’s economy is recovering and positive signals at the beginning of the year are consolidating also due to the payment of government arrears which has injected liquidity on the market, Nadeem Ilahi, the IMF mission chief to Albania told reporters during a visit to Albania.
However, the under-execution of public investments during this year remains a concern for the IMF mission which is assisting the Albanian government to recover the ailing economy supported by a Euro 334 million loan to pay off accumulated unpaid bills.
“It is clear that there is an under-execution of public investments. Failure to carry out investments could be a deterrent to economic growth. However, from what we can see, the performance of the economy is in line to what we expected at the beginning of the year and we see no reason to revise downward our forecasts for this year’s economic growth,” said Ilahi.
Public investments in the first seven months of this were down by 47 percent to around 24 billion lek (Euro 168 million) compared to the same period in 2013 when public investments soared in the run-up to the June 2013 general elections, according to Finance Ministry data. Public investments during the first seven months of this year were also down by 26.4 percent compared to the target set for this period.
The IMF mission concluded its two-week visit to Albania without the usual press conference with the Finance Minister and the Bank of Albania governor probably due to the latest incidents involving the arrest of the country’s central bank governor and 18 other officials over a Euro 5 million theft scandal.
A staff team from the International Monetary Fund led by Nadeem Ilahi visited Tirana during the period of August 26 to September 9, 2014 to conduct discussions on the second review of the arrangement under the Extended Fund Facility (EFF).
Staff discussed a number of issues with the authorities, including the 2015 government budget, structural reforms, and the Bank of Albania’s governance and policy framework. Discussions on the completion of the review will continue from Washington and the mission will return to complete its work at a date to be announced, said the IMF in a statement.