In the latest report on the economic situation in Albania, the International Monetary Fund warns that the financial repercussions of the November 26 earthquake will be significant. The country’s economic growth is now expected to be less than the previous estimated 4%. The IMF has not released a correct estimate yet.
The earthquake’s impact will be primarily felt in the tourism industry. Though the IMF gives no exact numbers, it predicts that the fall in touristic economic activity will exceed the positive impact from expected reconstruction efforts. As a result, economic growth will be slower than predicted for 2020.
The IMF raised concerns with regards to the transparency of the government’s reconstruction programs. It advised focusing on projects that will yield tangible results, and adopting international standards with regards to project procurement and implementation.
The report also warned of the adverse effects the COVID-19 pandemic will have on the country’s economy, with the tourism industry, again, suffering the most. The true impact remains to be seen in the following weeks.
In order to decrease casualties in human life and more, the IMF recommends ensuring that the health sector has sufficient resources and supporting the most affected.
The IMF advised the government to take great caution in implementing a possible voluntary asset disclosure program as previous experience in other countries has shown that such programs undermine tax compliance if users receive more favorable tax treatment than those who were compliant from the beginning. It also stressed that effective systems must be created first to detect evasion and to prevent opportunities for money laundering and corruption.