IMF: Albanian economy to shrink by 7.5%, save reserves for worsening of pandemic

The IMF in its last statement after the end of the virtual mission in Albania has announced that the country’s economy is expected to shrink by 7.5% this year, from about 5% expected in April.

According to their report, it is predicted that the economy will recover starting from the second half of 2020 and will gradually strengthen during 2021, with the mitigation of the impact of shocks and the continuation of reconstruction after the earthquake.

The International Monetary Fund has called for increased revenue and a more transparent fiscal system, as well as for maintaining financial stability, while an increase of non-performing loans is expected.

They further add that inflation is projected to remain low.

“We support the position of the Bank of Albania to pursue a easing monetary policy and a free exchange rate regime. Support for the economy should continue in 2021, but with the recovery of economic growth,” the report reads.

“There is a need to prepare reserve measures in case of a more severe pandemic. Public finances must balance between supporting the economy and addressing gaps. The significant increase in the fiscal deficit in 2020 aiming to mitigate the impact of crises is justified,” writes the IMF.

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