The International Monetary Fund (IMF) has given a downwards revision to Albania’s economic growth forecast for 2020.
In contrast to the 5 percent decline for 2020 projected in April, the IMF now forecasts a stronger decline of 7.5 percent in 2020,.
Also, the IMF predicts the recovery of the Albanian economy in 2021, after being affected by the Covid-19 crisis and the consequences of the 26 November earthquake.
These are the main conclusions of the IMF at the end of the Monitoring mission:
– The earthquake of November 2019 and the pandemic of COVID-19 have had great consequences for the lives of the people and the economy of Albania.
– In addition to a more severe global pandemic, the main risks come from rising public debt and debt, weaknesses in public finances and a relatively high level of non-performing loans.
– The state’s ability to collect taxes should be improved.
– The use of PPPs with unsolicited proposal should continue to be prevented. Fiscal risks are growing and must be carefully monitored and managed.
– Due to dependence on tourism and remittances, the economy is projected to shrink by about 7.5 percent in 2020.
– The fiscal deficit is projected to increase to about 7 percent of GDP and public debt just over 80 percent of GDP by the end of 2020
– The economy is projected to recover starting from the second half of 2020 and will be gradually strengthened during 2021.
– During 2021, the authorities should limit non-priority spending, to create space for sufficient spending on pandemic-related health care and social protection of the most vulnerable groups.
– The IMF is concerned that the Albanian Investment Corporation (KSHI) will bring new fiscal risks when it starts working.
