The Albanian government should replace the Transparency Board, appointed by Prime Minister Edi Rama to monitor and decide price rises in the country, with assistance and support to vulnerable members of society, according to the International Monetary Fund (IMF).
The IMF visited the country and released an end-of-mission statement where they commented on the economic situation amid the fall out of the war in Ukraine and a complex and volatile international situation.
“Given the challenges faced by the transparency board that monitors prices of a few staple food products, we see merits in replacing it with temporary, well-targeted support to the poor and vulnerable to cushion them from the effects of rising prices,” the report said.
It continues that efforts should continue to strengthen the country’s social protection system, including widening coverage to the poor and vulnerable in the informal sector.
“The 2022 budget (as revised in March) provides already ample space to support the people and the economy. Therefore, any additional revenue beyond what is currently projected in the budget should be saved to rebuild room for policy maneuver,” it notes, stating that the government should address its priorities, putting people first.
Other criticisms included the issue of rising public debt and the suggested tax amnesty. The government has drafted a fiscal amnesty law which will allow the declaration and deposit of assets legally in banks, without fiscal obligations and without criminal liability.
The IMF said, “We reiterate our advice against a possible tax amnesty given concerns about its impact on tax compliance as well as money laundering and governance risks.”
The experts warned that Albania’s economy is facing headwinds from the economic fallout of the war in Ukraine, through sharply rising prices and tighter global financial conditions.
They added that further monetary policy tightening in a timely manner is warranted to contain inflationary pressures and steer inflation expectations back toward the Bank of Albania’s target.