## 1albea2020001 - EXECUTIVE SUMMARY ## Source details **Canonical URL:** [1albea2020001 - EXECUTIVE SUMMARY](https://www.imf.org/-/media/files/publications/cr/2020/english/1albea2020001.pdf) ## Other formats - [Markdown version](/-/media/files/publications/cr/2020/english/1albea2020001.pdf.md) - [Structured JSON version](/-/media/files/publications/cr/2020/english/1albea2020001.pdf.json) --- ### Impact of the shocks - Earthquake on November 26, 2019: - 51 people were killed. - 11,490 housing units were destroyed. - Losses and damages amounted to 6.7 percent of GDP. - Pre-shock outlook (early-2020): - Real GDP growth in 2020 was expected at 3.5 percent. - Inflation projected to rise gradually towards its 3 percent target. - Public debt expected to fall to less than 60 percent of GDP by 2023. - Reserves stood at $3.3 billion, or 158 percent of the ARA metric at end-2019. - Twin shocks (earthquake and COVID-19) lead to a sharp contraction: - Real GDP projected to contract in 2020, by 5 percent. - Growth in 2021 (and to a smaller extent 2022) expected to be boosted by recovery and major reconstruction efforts. - External and exchange rate pressures: - Current account projected to rise to about 11 percent of GDP in 2020. - Tourism exports assumed to decrease by two-thirds (net current account effect of 5 percent of GDP). - Lower remittances and other private transfers by 1 percent of GDP. - As of end-March, the exchange rate had depreciated by 7 percent compared to end last year. - Reserves and financing needs: - Reserves decline scenarios: a decline in reserves of Euro 500 million would imply a remaining financing need of similar magnitude. - Identified urgent and temporary balance of payments needs exceeding one billion Euros (about a third of total reserves), far larger than estimated “excess international reserves”. ### Economic policies and fiscal response - Earthquake response: - Reconstruction program in the 2020 budget foresees reconstruction spending of 1.2 percent of GDP (emphasis on housing and education). - Donor pledges at a February meeting amounted to Euro 1.15 billion; staff assumes earthquake-related grant support will amount to slightly more than 1 percent of GDP in 2020. - COVID-19 response: - Fiscal package amounts to about 1.4 percent of GDP, including higher health spending, additional unemployment benefits and social assistance, a guarantee scheme to allow firms to continue wage payments, accelerated pension increases in April, support for small firms, and rescheduling of profit-tax instalments in 2020. - Authorities indicated potential for additional support measures in case of a more prolonged crisis, including in the June budget revision. - Fiscal outlook and financing gap: - Fiscal deficit expected to rise to about 5½ percent of GDP in 2020. - Economic downturn reduces revenues by over 2 percent of GDP. - Revised budget includes reconstruction spending of about 1.4 percent of GDP and COVID-19 measures (partly offset by expected savings on unrelated capital expenditures). - Total fiscal financing gap estimated at more than 5 percent of GDP (assuming domestic rollovers largely continue and drawdown of existing liquidity buffers). - Original financing plan hinged on a Euro 600 million (4 percent of GDP) Eurobond issuance; large FX debt service obligations of more than Euro 250 million due in April-May, followed by a maturing Eurobond repayment of Euro 250 million in November. - Monetary and financial sector measures: - Bank of Albania (BOA) policy rate reduced by 50 basis points to 0.5 percent on March 25. - BOA allowed borrowers affected by COVID-19 to postpone debt service payments for a three-month period by amending bank provisioning rules. - Staff advised maintaining loan classification and provisioning rules; allowed bank capital to temporarily fall below prudential limits if needed; stressed avoiding relaxation in AML-CFT procedures. - Authorities ready to support financial sector liquidity if needed. ### External financing plan (figures in millions of Euros) - Total financing requirement: 1,245 - Current account (incl. official transfers): 1,231 - Amortization: 514 - Of which: IMF: 34 - Change in gross reserves (increase = +): -500 - Total financing sources: 728 - Foreign direct investment, net: 741 - Official medium- and long-term project loans: 151 - Official guaranteed loans: 155 - Official budget support loans: 76 - Commercial borrowing (Eurobond and PBG): 0 - Other: -396 - Total financing needs: 517 - RFI disbursement: 172 - Remaining financing gap: 345 ### Staff views on policies and plans - Staff welcomed targeted, time-bound measures aligned with fiscal governance and transparency best practices. - Authorities exploring IMF and other IFI support, donor pledges, tapping domestic banks, direct/indirect BOA financing (within legal limits), loans from international banks, and a Eurobond when conditions permit. - Staff supported deferral of complex initiatives with fiscal risks (e.g., tax amnesty, operationalizing Albania Investment Corporation) until thorough assessment. ### Access and capacity to repay - Request for IMF support: - Authorities requested an outright purchase under the Rapid Financing Instrument (RFI) of SDR 139.30 million (about Euro 172 million), equivalent to 100 percent of quota. - The purchase amounts to 1.3 percent of GDP and will be used for direct budget support. - Staff supports the RFI purchase to address urgent balance of payments needs related to the earthquake and COVID-19; the balance of payments financing need is expected to be temporary and resolved within one year without major policy changes. - RFI could catalyze support by other IFIs (EU, EBRD, World Bank actively exploring options). - Capacity to repay: - Fund exposure to Albania projected to peak at 279 percent of quota in 2020. - Exposure projected to amount to about 9.3 percent of exports and 13 percent of international reserves in 2021. - Authorities’ policy and payment track record under past Fund-supported programs has been strong. - Implementation and monitoring: - Disbursement under the RFI will be used for budget support; authorities prepared a Memorandum of Understanding on servicing Albania’s obligations to the Fund. - Given the purchase under the RFI, staff proposes the resumption of post-program monitoring (PPM threshold to be exceeded again). - BOA committed to undergo a safeguards assessment (included in the authorities’ Letter of Intent). ### Risks - Downside risks are sizable: - Projections assume a relatively short-lived downturn; if reconstruction is delayed or COVID-19 impact is more severe/lasting, outcomes would be worse. - Albania is highly vulnerable to external spillovers, especially from Italy, Greece and Germany. - A substantially larger fiscal package could be required if downside risks materialize, implying larger financing needs and further policy adjustment. ### Staff appraisal and recommendation - Staff recommendation: - Staff supports the authorities’ request for a purchase under the Rapid Financing Instrument in the amount of SDR 139.30 million (about Euro 172 million), equivalent to 100 percent of quota, to address urgent balance of payments needs from the December 2019 earthquake and the COVID-19 pandemic. - Rationale and outlook: - Activity expected to contract sharply in 2020 before recovering later in the year and into 2021; economic outlook is unusually hard to predict. - Authorities have taken strong measures: relaxing monetary stance and expanding the budget deficit in 2020 to finance reconstruction and support the economy and people in need. - If COVID-19 impact is more severe or prolonged, further measures and larger financing needs will be necessary. --- ### Fiscal and debt sustainability: summary findings - Authorities demonstrated strong commitment to macroeconomic stability, keeping inflation and the fiscal deficit under control. - Once shocks are overcome, steadfast fiscal consolidation and containment of fiscal risks will be crucial to create a larger fiscal buffer before future shocks. - Staff stands ready to assist the authorities in addressing immediate and medium-term policy challenges and supporting a strong and sustainable economic recovery. ### Key macroeconomic projections (select real sector and prices) - Real GDP growth: - 2019: 2.2 - 2020: -5.0 - 2021: 8.0 - 2022: 6.7 - 2023: 3.4 - 2024: 3.7 - 2025: 3.7 - Domestic demand contribution to GDP: - 2020: -0.9 - 2021: 5.2 - 2022: 7.2 - Consumer Price Index (avg.): - 2020: 2.4 - 2021: 2.8 - 2022–2025 (each): 3.0 - GDP deflator: - 2020: 2.6 - 2021: 2.7 - 2022–2025 (each): 3.1 ### Fiscal sector: revenues, expenditures, balances (percent of GDP) - Total revenue and grants: - 2019: 27.4 - 2020: 26.3 - 2021: 26.9 - 2022: 26.8 - 2023: 26.9 - 2024: 27.2 - 2025: 27.5 - Tax revenue: - 2019: 25.4 - 2020: 23.2 - 2021: 23.9 - 2022: 24.3 - 2023: 24.6 - 2024: 24.9 - 2025: 25.3 - Total expenditure: - 2019: 29.4 - 2020: 31.7 - 2021: 29.9 - 2022: 29.3 - 2023: 28.8 - 2024: 28.8 - 2025: 28.9 - Interest (percent of GDP): - 2019: 2.1 - 2020: 2.1 - 2021: 1.6 - 2022–2024 (each): 1.5 - 2025: 1.4 - Overall balance (percent of GDP): - 2019: -2.0 - 2020: -5.4 - 2021: -3.1 - 2022: -2.5 - 2023: -2.0 - 2024: -1.6 - 2025: -1.4 - Primary balance (percent of GDP): - 2019: 0.1 - 2020: -3.3 - 2021: -1.4 - 2022: -1.0 - 2023: -0.5 - 2024: -0.1 - 2025: 0.0 ### Public debt dynamics - General Government Debt (percent of GDP): - 2019: 67.8 - 2020: 75.6 - 2021: 70.7 - 2022: 66.5 - 2023: 63.5 - 2024: 61.2 - 2025: 59.1 - Domestic vs External composition (percent of GDP): - Domestic debt 2020: 43.0; 2025: 36.4 - External debt 2020: 32.6; 2025: 22.7 - Note: The stock of general government debt includes arrears from central and local government. ### External sector and reserves - Current account balance (percent of GDP): - 2019: -7.6 - 2020: -11.2 - 2021: -8.1 - 2022: -8.0 - 2023: -7.8 - 2024: -7.7 - 2025: -7.5 - Trade balance (goods and services, percent of GDP): - 2019: -13.7 - 2020: -17.2 - 2021: -14.0 - 2022: -13.0 - Gross international reserves (millions of euros): - 2019: 3,360 - 2020: 2,860 - 2021: 3,262 - 2022: 3,641 - 2023: 3,806 - 2024: 3,971 - 2025: 4,136 - Reserves in months of imports of goods and services: - 2019: 8.3 - 2020: 5.3 - 2021: 5.5 - 2022: 5.7 - 2025: 5.4 - Gross external debt (percent of GDP): - 2019: 60.4 - 2020: 62.0 - 2021: 62.0 - 2022: 58.4 - 2023: 54.5 - 2024: 50.8 - 2025: 47.6 ### Monetary and financial sector indicators - Broad money growth: - 2019: 4.3 - 2020: -2.6 - 2021: 10.9 - 2022: 10.0 - 2023: 6.6 - 2024: 6.8 - 2025: 6.9 - Private credit growth: - 2019: 6.1 - 2020: -2.5 - 2021: 11.4 - 2022: 10.2 - 2023: 8.8 - 2024: 8.0 - 2025: 7.2 - Broad money (as percent of GDP): steady at 78.6 for 2020–2025 in the monetary survey memorandum. - Velocity (nominal GDP/broad money): 1.3 in central table; 1.27 in monetary survey memorandum. ### Financial soundness indicators (selected) - Nonperforming loans (gross) as a percent of total loans: - 2016: 18.3 - 2017: 13.2 - 2018: 11.1 - 2019: 8.4 - Regulatory capital as a percent of risk-weighted assets: - 2016: 15.7 - 2017: 16.6 - 2018: 18.3 - 2019: 18.3 - Return on equity (ROE), annual basis: - 2016: 7.2 - 2017: 15.7 - 2018: 13.0 - 2019: 13.5 ### Capacity to repay the Fund (select indicators) - Fund repurchases and charges (in millions of SDRs): - 2020: 29.5 - 2021: 51.4 - 2022: 54.6 - 2023: 87.4 - 2024: 116.7 - Fund credit outstanding (end of period, in millions of SDRs): - 2020: 388.9 - 2021: 344.4 - 2022: 295.2 - 2023: 211.1 - 2024: 96.2 - 2025: 26.3 - Fund credit outstanding (end of period, in percent of gross international reserves): - 2020: 16.8 - 2021: 13.0 - 2022: 10.0 - 2023: 6.8 - 2024: 3.0 - 2025: 0.8 ### Policy implications and recommended priorities - Maintain fiscal consolidation once shocks subside to rebuild buffers and reduce vulnerability to future shocks. - Contain fiscal risks, including careful management of guarantees and arrears (the fiscal balance includes guarantees for new loans to the energy and non-energy sectors; the debt stock includes arrears). - Support a sustainable recovery with IMF technical and policy assistance to address immediate and medium-term challenges. --- ### Annex I. Debt Sustainability Analysis — Summary ### Public Debt Sustainability — Summary Findings - COVID-19 and the November 2019 earthquake raise public debt above 75 percent of GDP in 2020. - Debt projected to decline to about 59.1 percent by 2025 under baseline, but remain high and subject to significant risks. - The shocks set back the ongoing debt reduction process by about 2 years. - Gross financing requirements remain high, reflecting sizable rollover needs, including maturing Eurobonds in 2020. ### A. Background — Debt Profile - Over a decade, the share of external debt in total public debt rose from about 30 percent in 2008 to about 47 percent at end 2019. - Domestic debt represents 53 percent of total public debt. - Share of long-term paper in total domestic debt increased to more than 67 percent in 2019. - Average weighted maturity of domestic public debt increased to more than two years as of December 2019. - 99.5 percent of domestic debt denominated in domestic currency. - 60 percent of external debt denominated in Euro. - Holder composition of domestic public debt (2019, excl. arrears and guarantees): - Central bank: 8% - Commercial banks: 63% - Nonbanks: 14% - Individuals: 14% - Holder composition of external public debt (2019, excl. guarantees): - Multilateral: 57% - Official bilateral: 17% - Private and other: 26% - Policy note: Further lengthening of maturities is needed; MOFE encouraged to resume issuance of short-term debt (3-6 months maturity) to support treasury liquidity management. ### B. Public DSA Results — Baseline Scenario - Macroeconomic assumptions: - GDP growth in 2020 revised down by about 8.5 percentage points relative to pre-earthquake baseline to -5 percent. - Baseline assumes international financial markets temporarily difficult to access in 2020. - Debt projections: - Gross debt projected to decline from a peak of about 75.6 percent in 2020 to about 59.1 percent of GDP in 2025. - Gross financing needs projected to remain elevated, averaging around 18.9 percent from estimated 23.7 percent in 2020. - Alternative scenarios: - Constant-primary-balance scenario (primary deficit remains at 2020 level of 3.3 percent of GDP): debt ratio would remain about 73.6 percent of GDP. - Historical scenario (ten-year historical averages): projects debt at about 71.5 percent of GDP by 2025. - Vulnerabilities: - Gross financing needs breach the 15 percent threshold. - Debt profile vulnerable to high external financing needs, sizeable share of foreign currency debt, and debt held by non-residents. - Exchange rate risks important given projected increase in foreign currency debt share. ### Stress Tests and Stochastic Simulations - Under stress scenarios, debt ratio remains above 60 percent of GDP; sensitive to fiscal stance, interest rate and real GDP growth shocks. - Debt reaches between 59 to 72 percent of GDP in 2025 under stress scenarios. - Sensitivity to exchange rate shocks: public debt reaches 62 percent of GDP. - Combined shock: debt-to-GDP ratio increases to 72.1 percent of GDP. - Fan charts: under asymmetric risk distribution, high certainty that debt stock will be in range 60 to 75 percent of GDP. ### External Debt Sustainability - External debt-to-GDP ratio remains elevated. - Most external debt held by multilateral creditors and bilateral development agencies; share of commercial debt expected to increase over medium-term. - Most foreign public debt denominated in euros, followed by SDRs (IMF loans). - External debt projections: - External debt projected to decline to below 50 percent by 2025. - External private debt stock expected to fall from about 32 to 24 percent of GDP by 2025. - Composition and service dynamics: - Accumulation of FDI-related debt liabilities will slow as large energy projects taper off. - Remaining maturity of €250 million of a €450 million Eurobond issued in 2015 will come due in 2020 (after retiring €200 in October 2018). - Total public and private external debt service expected to increase to 19 percent of GDP in 2020, fall to 12 percent by 2024, then increase again to 15 percent with large amortization payments in 2025. - Commercial debt as percent of total public sector debt expected to increase from 13 percent at end-2019 to 25 percent in 2025. --- ### Stress test results (selected) - Under a 30 percent exchange rate depreciation shock, external debt would peak at 91 percent of GDP in 2021 before declining to 70 percent by 2025. - Following a shock to the current account of half a standard deviation (around 1 percent of GDP), external debt would peak at 63 percent of GDP in 2021 and decline to 52 percent by 2025. - One-time real depreciation of 30 percent occurs in 2020 (applied in the real depreciation shock). ### Baseline external debt trajectory (selected) - 2019: 60.0 percent of GDP - 2020: 62.4 percent of GDP - 2021: 62.2 percent of GDP - 2022: 58.5 percent of GDP - 2023: 54.7 percent of GDP - 2024: 51.1 percent of GDP - 2025: 47.9 percent of GDP ### Change in external debt and drivers (selected) - Change in external debt (2019–2025, selected years): - 2019: -2.8 - 2020: 2.4 - 2021: -0.2 - 2022: -3.7 - 2023: -3.8 - 2024: -3.6 - 2025: -3.2 - Identified external debt-creating flows (aggregate 4+8+9), selected years: - 2019: 0.5 - 2020: 11.9 - 2021: -6.5 - 2022: -5.1 - 2023: -0.5 - 2024: -0.7 - 2025: -0.8 - Current account deficit, excluding interest payments (selected years): - 2019: 6.8 percent of GDP - 2020: 10.3 percent of GDP - 2021: 7.4 percent of GDP - 2022: 7.4 percent of GDP - 2023: 7.3 percent of GDP - 2024: 7.4 percent of GDP - 2025: 7.2 percent of GDP - Net non-debt creating capital inflows (selected years): - 2019: -6.5 percent of GDP - 2020: -2.6 percent of GDP - 2021: -10.1 percent of GDP - 2022: -9.6 percent of GDP - 2023: -6.5 percent of GDP - 2024: -6.6 percent of GDP - 2025: -6.7 percent of GDP ### External vulnerability indicators (selected) - External debt-to-exports ratio (percent): - 2019: 190.4 - 2020: 297.5 - 2021: 189.5 - 2022: 179.6 - 2023: 165.3 - 2024: 153.9 - 2025: 142.6 - Gross external financing need (billions of US dollars), selected: - 2015: 3.4 - 2016: 2.8 - 2017: 3.0 - 2018: 3.6 - 2019: 3.5 - 2020: 4.2 - 2021: 3.7 - 2022: 3.9 - 2023: 4.0 - 2024: 4.0 - 2025: 4.9 - Gross external financing need (percent of GDP), historical values: - 2015: 30.2 - 2016: 23.8 - 2017: 23.0 - 2018: 23.8 - 2019: 23.2 ### IMF recommended fiscal adjustment (selected) - Primary balance under IMF Recommended Fiscal Adjustment: - 2020: 0.7 percent of GDP - 2021: 1.2 percent of GDP - 2022: 1.5 percent of GDP - 2023: 1.5 percent of GDP - 2024: 1.5 percent of GDP ### Underlying macro assumptions (selected) - Real GDP growth (baseline): - 2020: -5.0 percent - 2021: 8.0 percent - 2022: 6.7 percent - 2023: 3.4 percent - 2024: 3.7 percent - 2025: 3.7 percent - Inflation (GDP deflator, baseline): - 2020: 2.6 percent - 2021: 2.7 percent - 2022–2025: 3.1 percent (each year) - Effective interest rate (baseline): - 2020: 3.3 percent - 2021: 2.1 percent - 2022: 2.4 percent - 2023: 2.9 percent - 2024: 3.0 percent - 2025: 2.9 percent --- ### Emergency financing request (authorities' letter highlights) - Request: - Emergency financing from the IMF in the amount equivalent of SDR 139.30 million (about euro 172 million), corresponding to a purchase of 100 percent of Albania’s quota under the RFI. - Purpose: - To meet urgent balance of payments needs from the twin shocks and to catalyze additional financial resources to close the fiscal gap and ease balance of payments pressure in 2020. - Key commitments and assurances: - Fiscal commitment to resume consolidation once shocks are overcome and to bring public debt-to-GDP ratio to 60 percent by 2025. - Monetary easing: BoA lowered policy rate by 0.5 percentage points to an all-time low of 0.5 percent and will allow exchange rate flexibility. - Safeguards: authorities commit to a safeguards assessment and to provide BoA external audit reports; will prepare a government-BoA MoU on Fund servicing modalities. - Policy response overview: - Earthquake: reconstruction cost estimated at 1.2 percent of GDP; donors’ pledges for Euro 1.15 billion; grants for about 1 percentage point of GDP (preliminary, 2020). - COVID-19: cases risen to 380 (as of April 7); containment measures included school closures, curfew, border closures, and support measures. - Fiscal package amounting to 1.4 percent of GDP implemented, including basic minimum income scheme, increased social assistance and pension increases, rescheduling SMEs profit-tax in 2020, and a temporary credit sovereign guarantee. - Consideration of a Eurobond amounting to Euro 500 million, timing dependent on market evolution. - Key statistics and figures (preserved exactly): - SDR 139.30 million - about euro 172 million - 100 percent of Albania’s quota under the Rapid Financing Instrument (RFI) - growth at 3.5 percent in 2020 - 51 lives (earthquake fatalities) - close to 7 percentage points of GDP (earthquake damage estimate) - Twelve thousand families - cases risen to 380 (as of April 7) - reconstruction cost estimated at 1.2 percent of GDP - donors’ pledges for Euro 1.15 billion - grants for about 1 percentage point of GDP (preliminary, 2020) - fiscal package amounting to 1.4 percent of GDP - policy rate lowered by 0.5 percentage points, to an all-time low of 0.5 percent - public debt-to-GDP ratio target: 60 percent by 2025 - Eurobond amounting to Euro 500 million *Source: 1albea2020001 - EXECUTIVE SUMMARY (IMF).* ### EXECUTIVE SUMMARY ### 1albea2020001 - EXECUTIVE SUMMARY ### IMPACT OF THE SHOCKS - The earthquake on November 26, 2019: - 51 people were killed. - 11,490 housing units were destroyed. - Losses and damages amounted to 6.7 percent of GDP. - Pre-shock outlook (early-2020): real GDP growth in 2020 was expected at 3.5 percent; inflation projected to rise gradually towards its 3 percent target; public debt expected to fall to less than 60 percent of GDP by 2023; reserves stood at $3.3 billion, or 158 percent of the ARA metric at end-2019. - Twin shocks (earthquake and COVID-19) lead to a sharp contraction in activity: - Real GDP projected to contract sharply in 2020, by 5 percent. - Growth in 2021 (and to a smaller extent 2022) expected to be boosted by recovery and major reconstruction efforts. - External and exchange rate pressures: - Current account projected to rise to about 11 percent of GDP in 2020. - Tourism exports assumed to decrease by two-thirds (net current account effect of 5 percent of GDP). - Lower remittances and other private transfers by 1 percent of GDP. - As of end-March, the exchange rate had depreciated by 7 percent compared to end last year. - Reserves and financing needs: - Reserves decline scenarios: a decline in reserves of Euro 500 million would imply a remaining financing need of similar magnitude. - Identified urgent and temporary balance of payments needs exceeding one billion Euros (about a third of total reserves), far larger than estimated “excess international reserves”. ### ECONOMIC POLICIES - Earthquake response: - Reconstruction program incorporated in the 2020 budget, foreseeing reconstruction spending of 1.2 percent of GDP (emphasis on housing and education). - Donor pledges at a February meeting amounted to Euro 1.15 billion; staff assumes earthquake-related grant support will amount to slightly more than 1 percent of GDP in 2020. - COVID-19 response: - Fiscal package amounts to about 1.4 percent of GDP, including: higher health spending, additional unemployment benefits and social assistance, a guarantee scheme to allow firms to continue wage payments, accelerated pension increases in April, support for small firms, and rescheduling of profit-tax instalments in 2020. - Authorities indicated potential for additional support measures in case of a more prolonged crisis, including in the June budget revision. - Fiscal outlook and financing gap: - Fiscal deficit expected to rise to about 5½ percent of GDP in 2020. - Economic downturn reduces revenues by over 2 percent of GDP. - Revised budget includes reconstruction spending of about 1.4 percent of GDP and COVID-19 measures (partly offset by expected savings on unrelated capital expenditures). - Total fiscal financing gap estimated at more than 5 percent of GDP (assuming domestic rollovers largely continue and drawdown of existing liquidity buffers). - Original financing plan hinged on a Euro 600 million (4 percent of GDP) Eurobond issuance; large FX debt service obligations of more than Euro 250 million due in April-May, followed by a maturing Eurobond repayment of Euro 250 million in November. - Monetary and financial sector measures: - Bank of Albania (BOA) policy rate reduced by 50 basis points to 0.5 percent on March 25. - BOA allowed borrowers affected by COVID-19 to postpone debt service payments for a three-month period by amending bank provisioning rules. - Staff advised maintaining loan classification and provisioning rules; allowed bank capital to temporarily fall below prudential limits if needed; stressed avoiding relaxation in AML-CFT procedures. - Authorities ready to support financial sector liquidity if needed. - External financing plan (table figures in millions of Euros): - Total financing requirement: 1,245 - Current account (incl. official transfers): 1,231 - Amortization: 514 - Of which: IMF: 34 - Change in gross reserves (increase = +): -500 - Total financing sources: 728 - Foreign direct investment, net: 741 - Official medium- and long-term project loans: 151 - Official guaranteed loans: 155 - Official budget support loans: 76 - Commercial borrowing (Eurobond and PBG): 0 - Other: -396 - Total financing needs: 517 - RFI disbursement: 172 - Remaining financing gap: 345 - Staff views on policies and plans: - Staff welcomed targeted, time-bound measures aligned with fiscal governance and transparency best practices. - Authorities actively exploring IMF and other IFI support, donor pledges, tapping domestic banks, direct/indirect BOA financing (within legal limits), loans from international banks, and a Eurobond when conditions permit. - Staff supported deferral of complex initiatives with fiscal risks (e.g., tax amnesty, operationalizing Albania Investment Corporation) until thorough assessment. ### ACCESS AND CAPACITY TO REPAY - Request for IMF support: - Authorities requested an outright purchase under the Rapid Financing Instrument (RFI) of SDR 139.30 million (about Euro 172 million), equivalent to 100 percent of quota. - The purchase amounts to 1.3 percent of GDP and will be used for direct budget support. - Staff supports the RFI purchase to address urgent balance of payments needs related to the earthquake and COVID-19; the balance of payments financing need is expected to be temporary and resolved within one year without major policy changes. - RFI could catalyze support by other IFIs (EU, EBRD, World Bank actively exploring options). - Capacity to repay: - Fund exposure to Albania projected to peak at 279 percent of quota in 2020. - Exposure projected to amount to about 9.3 percent of exports and 13 percent of international reserves in 2021. - Authorities’ policy and payment track record under past Fund-supported programs has been strong. - Implementation and monitoring: - Disbursement under the RFI will be used for budget support; authorities prepared a Memorandum of Understanding on servicing Albania’s obligations to the Fund. - Given the purchase under the RFI, staff proposes the resumption of post-program monitoring (PPM threshold to be exceeded again). - BOA committed to undergo a safeguards assessment (included in the authorities’ Letter of Intent). ### RISKS - Downside risks are sizable: - Projections assume a relatively short-lived downturn; if reconstruction is delayed or COVID-19 impact is more severe/lasting, outcomes would be worse. - Albania is highly vulnerable to external spillovers, especially from Italy, Greece and Germany. - A substantially larger fiscal package could be required if downside risks materialize, implying larger financing needs and further policy adjustment. ### STAFF APPRAISAL - Staff recommendation: - Staff supports the authorities’ request for a purchase under the Rapid Financing Instrument in the amount of SDR 139.30 million (about Euro 172 million), equivalent to 100 percent of quota, to address urgent balance of payments needs from the December 2019 earthquake and the COVID-19 pandemic. - Rationale and outlook: - Activity expected to contract sharply in 2020 before recovering later in the year and into 2021; economic outlook is unusually hard to predict. - Authorities have taken strong measures: relaxing monetary stance and expanding the budget deficit in 2020 to finance reconstruction and support the economy and people in need. - If COVID-19 impact is more severe or prolonged, further measures and larger financing needs will be necessary. *Source: 1albea2020001 - EXECUTIVE SUMMARY (IMF).* ### 22. The Albanian authorities remain committed to ensuring fiscal and debt ### 22. The Albanian authorities remain committed to ensuring fiscal and debt sustainability ### Fiscal and debt sustainability: summary findings - Authorities have demonstrated a strong commitment to macroeconomic stability, keeping inflation and the fiscal deficit under control. - Once shocks are overcome, steadfast fiscal consolidation and containment of fiscal risks will be crucial to create a larger fiscal buffer before future shocks. - Staff stands ready to assist the authorities in addressing immediate and medium-term policy challenges and supporting a strong and sustainable economic recovery. ### Key macroeconomic projections (select real sector and prices) - Real GDP growth: - 2019: 2.2 - 2020: -5.0 - 2021: 8.0 - 2022: 6.7 - 2023: 3.4 - 2024: 3.7 - 2025: 3.7 - Domestic demand contribution to GDP: - 2020: -0.9 - 2021: 5.2 - 2022: 7.2 - Consumer Price Index (avg.): - 2020: 2.4 - 2021: 2.8 - 2022–2025 (each): 3.0 - GDP deflator: - 2020: 2.6 - 2021: 2.7 - 2022–2025 (each): 3.1 ### Fiscal sector: revenues, expenditures, balances (percent of GDP) - Total revenue and grants: - 2019: 27.4 - 2020: 26.3 - 2021: 26.9 - 2022: 26.8 - 2023: 26.9 - 2024: 27.2 - 2025: 27.5 - Tax revenue: - 2019: 25.4 - 2020: 23.2 - 2021: 23.9 - 2022: 24.3 - 2023: 24.6 - 2024: 24.9 - 2025: 25.3 - Total expenditure: - 2019: 29.4 - 2020: 31.7 - 2021: 29.9 - 2022: 29.3 - 2023: 28.8 - 2024: 28.8 - 2025: 28.9 - Interest (percent of GDP): - 2019: 2.1 - 2020: 2.1 - 2021: 1.6 - 2022–2024 (each): 1.5 - 2025: 1.4 - Overall balance (percent of GDP): - 2019: -2.0 - 2020: -5.4 - 2021: -3.1 - 2022: -2.5 - 2023: -2.0 - 2024: -1.6 - 2025: -1.4 - Primary balance (percent of GDP): - 2019: 0.1 - 2020: -3.3 - 2021: -1.4 - 2022: -1.0 - 2023: -0.5 - 2024: -0.1 - 2025: 0.0 ### Public debt dynamics - General Government Debt (percent of GDP): - 2019: 67.8 - 2020: 75.6 - 2021: 70.7 - 2022: 66.5 - 2023: 63.5 - 2024: 61.2 - 2025: 59.1 - Domestic vs External composition (percent of GDP): - Domestic debt 2020: 43.0; 2025: 36.4 - External debt 2020: 32.6; 2025: 22.7 - Note: The stock of general government debt includes arrears from central and local government. ### External sector and reserves - Current account balance (percent of GDP): - 2019: -7.6 - 2020: -11.2 - 2021: -8.1 - 2022: -8.0 - 2023: -7.8 - 2024: -7.7 - 2025: -7.5 - Trade balance (goods and services, percent of GDP): - 2019: -13.7 - 2020: -17.2 - 2021: -14.0 - 2022: -13.0 - Gross international reserves (millions of euros): - 2019: 3,360 - 2020: 2,860 - 2021: 3,262 - 2022: 3,641 - 2023: 3,806 - 2024: 3,971 - 2025: 4,136 - Reserves in months of imports of goods and services: - 2019: 8.3 - 2020: 5.3 - 2021: 5.5 - 2022: 5.7 - 2025: 5.4 - Gross external debt (percent of GDP): - 2019: 60.4 - 2020: 62.0 - 2021: 62.0 - 2022: 58.4 - 2023: 54.5 - 2024: 50.8 - 2025: 47.6 ### Monetary and financial sector indicators - Broad money growth: - 2019: 4.3 - 2020: -2.6 - 2021: 10.9 - 2022: 10.0 - 2023: 6.6 - 2024: 6.8 - 2025: 6.9 - Private credit growth: - 2019: 6.1 - 2020: -2.5 - 2021: 11.4 - 2022: 10.2 - 2023: 8.8 - 2024: 8.0 - 2025: 7.2 - Broad money (as percent of GDP): steady at 78.6 for 2020–2025 in the monetary survey memorandum. - Velocity (nominal GDP/broad money): 1.3 in central table; 1.27 in monetary survey memorandum (consistent reporting across tables). ### Financial soundness indicators (selected) - Nonperforming loans (gross) as a percent of total loans: - 2016: 18.3 - 2017: 13.2 - 2018: 11.1 - 2019: 8.4 - Regulatory capital as a percent of risk-weighted assets: - 2016: 15.7 - 2017: 16.6 - 2018: 18.3 - 2019: 18.3 - Return on equity (ROE), annual basis: - 2016: 7.2 - 2017: 15.7 - 2018: 13.0 - 2019: 13.5 ### Capacity to repay the Fund (select indicators) - Fund repurchases and charges (in millions of SDRs): - 2020: 29.5 - 2021: 51.4 - 2022: 54.6 - 2023: 87.4 - 2024: 116.7 - Fund credit outstanding (end of period, in millions of SDRs): - 2020: 388.9 - 2021: 344.4 - 2022: 295.2 - 2023: 211.1 - 2024: 96.2 - 2025: 26.3 - Fund credit outstanding (end of period, in percent of gross international reserves): - 2020: 16.8 - 2021: 13.0 - 2022: 10.0 - 2023: 6.8 - 2024: 3.0 - 2025: 0.8 ### Policy implications and recommended priorities - Maintain fiscal consolidation once shocks subside to rebuild buffers and reduce vulnerability to future shocks. - Contain fiscal risks, including careful management of guarantees and arrears (the fiscal balance includes guarantees for new loans to the energy and non-energy sectors; the debt stock includes arrears). - Support a sustainable recovery with IMF technical and policy assistance to address immediate and medium-term challenges. *Source: Albanian authorities; and IMF staff estimates and calculations.* ### Annex I. Debt Sustainability Analysis ### Annex I. Debt Sustainability Analysis ### Public Debt Sustainability — Summary Findings - The COVID-19 pandemic combined with the strong earthquake that struck Albania in November 2019 resulted in additional expenditure pressures and an economic contraction that elevate Albania’s public debt to above 75 percent of GDP in 2020. - As the pandemic is expected to subside after 2020 and growth is boosted by reconstruction, Albania’s public debt is projected to return to its downward path and decline over the medium-term to about 59.1 percent by 2025—remaining high, and subject to significant risks. - The shocks are projected to result in a setback for the ongoing debt reduction process by about 2 years. - Gross financing requirements remain high, reflecting sizable rollover needs, including maturing Eurobonds in 2020. ### A. Background — Debt Profile - Over a decade, the share of external debt in total public debt went up from about 30 percent in 2008 to about 47 percent at end 2019. - Domestic debt represents 53 percent of total public debt. - The share of long-term paper in total domestic debt increased from about one-half in 2011 to more than 67 percent in 2019. - The average weighted maturity of domestic public debt increased from less than one year in 2011 to more than two years as of December 2019. - 99.5 percent of domestic debt was denominated in domestic currency. - 60 percent of external debt was denominated in Euro. - Holder composition of domestic public debt (2019, share of total excl. arrears and guarantees): - Central bank: 8% - Commercial banks: 63% - Nonbanks: 14% - Individuals: 14% - Holder composition of external public debt (2019, share of total excl. guarantees): - Multilateral: 57% - Official bilateral: 17% - Private and other: 26% - Policy note: Further lengthening of maturities is needed to help reduce very high annual financing requirements. Ongoing development of the market maker program for longer-term benchmark bond issuances and seeking of foreign official financing should be helpful. The MOFE is encouraged to resume the issuance of short-term debt (specifically for 3-6 months maturity) to support treasury liquidity management and market development. ### B. Public DSA Results — Baseline Scenario - Macroeconomic assumptions: - GDP growth in 2020 has been revised down by about 8.5 percentage points relative to the pre-earthquake baseline scenario to -5 percent. - The baseline assumes that international financial markets will be temporarily difficult to access in 2020. - Debt level projections under the baseline: - Gross debt is projected to decline gradually from a peak of about 75.6 percent in 2020 to about 59.1 percent of GDP in 2025. - Gross financing needs are projected to remain elevated, averaging around 18.9 percent from estimated 23.7 percent in 2020. - Alternative scenarios: - Constant-primary-balance scenario (assuming the primary deficit remains at the level of 2020 at 3.3 percent of GDP): the debt ratio would remain high, at about 73.6 percent of GDP over the projection horizon. - Historical scenario (assuming real GDP growth, the primary balance and real interest rates at the historical average of the past ten years): projects debt at about 71.5 percent of GDP by 2025. - Heat map and vulnerabilities: - Risks related to the level of debt remain elevated. - Gross financing needs breach the 15 percent threshold over the projection period. - The debt profile shows moderate risks related to the declining share of short-term debt, but remains vulnerable to high external financing needs, the sizeable share of foreign currency debt, and debt held by non-residents. - Exchange rate risks will remain important given the projected increase in foreign currency debt (as a share of total debt). ### Stress Tests and Stochastic Simulations - Under stress scenarios, the debt ratio remains above 60 percent of GDP and is most sensitive to the fiscal stance, interest rate and real GDP growth shocks. - Under those stress scenarios, debt reaches between 59 to 72 percent of GDP in 2025. - Sensitivity to exchange rate shocks: public debt reaches 62 percent of GDP under this scenario. - Combined shock (largest effect of individual shocks on real GDP growth, inflation, primary balance, exchange rate and interest rate): debt-to-GDP ratio will increase to 72.1 percent of GDP. - Fan charts (symmetric and asymmetric risk distributions): under an asymmetric distribution of risks, there is a high level of certainty that the debt stock will be in the range of 60 to 75 percent of GDP. ### External Debt Sustainability - The external debt-to-GDP ratio remains elevated. - Most external debt continues to be held by multilateral creditors and bilateral development agencies, though the share of commercial debt is expected to increase over the medium-term. - Most foreign public debt is denominated in euros (inter-government loans and Eurobonds), followed by SDRs (IMF loans). - External debt projections: - External debt is projected to decline to below 50 percent by 2025. - External private debt stock is expected to fall from about 32 to 24 percent of GDP by 2025. - Composition and service dynamics: - Accumulation of FDI-related debt liabilities will slow as investment in large energy projects tapers off, but such liabilities will likely remain the largest component of the private external debt stock. - Public external debt note: the remaining maturity of €250 million of a €450 million Eurobond issued in 2015 (after having retired €200 in October 2018) will come due in 2020. - Total public and private external debt service is expected to increase to 19 percent of GDP in 2020, fall to 12 percent by 2024, then increase again to 15 percent with large amortization payments in 2025. - Commercial debt as a percentage of total public sector debt is expected to increase from 13 percent at end-2019 to 25 percent in 2025. *Source: Annex I. Debt Sustainability Analysis (IMF).* ### 8. Stress test results. Under a 30 percent exchange rate depreciation shock, external debt ### 8. Stress test results. ### Stress test findings - Under a 30 percent exchange rate depreciation shock, external debt would peak at 91 percent of GDP in 2021 before declining to 70 percent by 2025. - Following a shock to the current account of half a standard deviation (around 1 percent of GDP), external debt would peak at 63 percent of GDP in 2021 and gradually decline to 52 percent by 2025. - One-time real depreciation of 30 percent occurs in 2020 (as applied in the real depreciation shock). ### Baseline external debt trajectory (selected points from Table 1: External Debt, baseline) - 2019: 60.0 percent of GDP - 2020: 62.4 percent of GDP - 2021: 62.2 percent of GDP - 2022: 58.5 percent of GDP - 2023: 54.7 percent of GDP - 2024: 51.1 percent of GDP - 2025: 47.9 percent of GDP ### Change in external debt and identified drivers (selected items from Table 1) - Change in external debt (2019–2025, selected years): - 2019: -2.8 - 2020: 2.4 - 2021: -0.2 - 2022: -3.7 - 2023: -3.8 - 2024: -3.6 - 2025: -3.2 - Identified external debt-creating flows (aggregate 4+8+9), selected years: - 2019: 0.5 - 2020: 11.9 - 2021: -6.5 - 2022: -5.1 - 2023: -0.5 - 2024: -0.7 - 2025: -0.8 - Current account deficit, excluding interest payments (selected years): - 2019: 6.8 percent of GDP - 2020: 10.3 percent of GDP - 2021: 7.4 percent of GDP - 2022: 7.4 percent of GDP - 2023: 7.3 percent of GDP - 2024: 7.4 percent of GDP - 2025: 7.2 percent of GDP - Net non-debt creating capital inflows (negative values indicate net outflows), selected years: - 2019: -6.5 percent of GDP - 2020: -2.6 percent of GDP - 2021: -10.1 percent of GDP - 2022: -9.6 percent of GDP - 2023: -6.5 percent of GDP - 2024: -6.6 percent of GDP - 2025: -6.7 percent of GDP ### External vulnerability indicators (selected) - External debt-to-exports ratio (in percent), selected years: - 2019: 190.4 - 2020: 297.5 - 2021: 189.5 - 2022: 179.6 - 2023: 165.3 - 2024: 153.9 - 2025: 142.6 - Gross external financing need (in billions of US dollars), selected years: - 2015: 3.4 - 2016: 2.8 - 2017: 3.0 - 2018: 3.6 - 2019: 3.5 - 2020: 4.2 - 2021: 3.7 - 2022: 3.9 - 2023: 4.0 - 2024: 4.0 - 2025: 4.9 - Gross external financing need (in percent of GDP), selected historical values reported: - 2015: 30.2 - 2016: 23.8 - 2017: 23.0 - 2018: 23.8 - 2019: 23.2 ### Scenarios, shocks and additional stress-test results - Individual permanent one-half standard deviation shocks applied include: real interest rate shock, growth rate shock, and current account balance shock. - Combined shock scenarios and bound tests reported peak and trajectory outcomes: - Current account shock (half standard deviation, ~1 percent of GDP): external debt peaks at 63 percent of GDP in 2021, declines to 52 percent by 2025. - Real depreciation shock (one-time 30 percent): external debt peaks at 91 percent of GDP in 2021 under that shock, declines to 70 percent by 2025. - Combined shocks also evaluated (figures show combined-shock outcomes and bound tests with labelled scenario averages), with combined-shock outcomes reported (example box values): combined shock projection 51 (percent of GDP) in the displayed box for a combined scenario. ### IMF recommended fiscal adjustment (as shown in stress-test panels) - Primary balance under IMF Recommended Fiscal Adjustment (selected years): - 2020: 0.7 percent of GDP - 2021: 1.2 percent of GDP - 2022: 1.5 percent of GDP - 2023: 1.5 percent of GDP - 2024: 1.5 percent of GDP ### Underlying macro assumptions (selected) - Real GDP growth (baseline projections): - 2020: -5.0 percent - 2021: 8.0 percent - 2022: 6.7 percent - 2023: 3.4 percent - 2024: 3.7 percent - 2025: 3.7 percent - Inflation (GDP deflator, baseline projections): - 2020: 2.6 percent - 2021: 2.7 percent - 2022–2025: 3.1 percent (each year) - Effective interest rate (baseline projections): - 2020: 3.3 percent - 2021: 2.1 percent - 2022: 2.4 percent - 2023: 2.9 percent - 2024: 3.0 percent - 2025: 2.9 percent *Source: IMF staff.* ### 3. Against this background, the government of Albania requests emergency financing from ### 1albea2020001 - 3. Against this background, the government of Albania requests emergency financing from ### Emergency financing request and purpose - The government of Albania requests emergency financing from the IMF in the amount equivalent of SDR 139.30 million (about euro 172 million), corresponding to a purchase of 100 percent of Albania’s quota under the Rapid Financing Instrument (RFI). - Purpose: to meet the urgent and present balance of payments needs arising from the twin shocks, particularly the COVID-19 pandemic, and to have a catalytic effect in helping secure additional financial resources to close the fiscal gap and ease pressure on the balance of payments in 2020. - The authorities authorize the IMF to publish this letter and the request for a purchase under the RFI. ### Macroeconomic outlook, risks, and policy commitments - Near-term outlook: challenging and subject to unusually large uncertainties and key downside risks; GDP will contract in 2020. - Pre-shock projection: at the end of 2019, Albanian authorities were projecting growth at 3.5 percent in 2020. - Earthquake impact: the strongest earthquake in the last 40 years claimed 51 lives in November 2019 and caused damage estimated close to 7 percentage points of GDP. Twelve thousand families were left without a house. - COVID-19: first contagion recorded in early March; cases risen to 380 (as of April 7). - Recovery expectation: authorities agree growth could promptly recover in 2021 as the pandemic fades and reconstruction efforts fuel activity; ongoing structural reforms and the just-started EU accession process may support recovery. - Fiscal commitment: once shocks are overcome, authorities will continue the standing policy of limiting the fiscal deficit to ensure sustainability over the medium term and intend to resume fiscal consolidation efforts to bring the public debt-to-GDP ratio to 60 percent by 2025. - Monetary stance: authorities have eased monetary policy; BoA lowered its policy rate by 0.5 percentage points to an all-time low of 0.5 percent and will continue to allow flexibility in the exchange rate to help absorb shocks. - Financial stability: authorities will continue necessary measures to preserve financial stability while sustaining economic activity. ### Safeguards, central bank arrangements, and repayment modality - Safeguards: in line with the IMF’s safeguards policy, authorities commit to undertake a safeguards assessment in collaboration with IMF staff, provide BoA’s most recently completed external audit reports, and coordinate IMF staff meetings with central bank staff and external auditors. - Use of resources and repayment: given central bank independence and budget financing constraints, authorities intend to use the domestic currency equivalent of Fund resources for budgetary financing and will prepare a government-BoA MoU establishing a framework on the modalities for repayment to the Fund. - Policy assurances: authorities will avoid measures or policies that would compound balance of payments difficulties, will comply with the IMF’s Articles of Agreement (including provisions on restrictions on making of payments and transfers for current international transactions and bilateral payments under Article VIII), and will avoid additional trade restrictions for balance of payments purposes. ### Policy response to the two shocks (earthquake and COVID-19) - Earthquake response: - Government estimated reconstruction cost at 1.2 percent of GDP and established a new Reconstruction Ministry. - Donors’ conference collected pledges for Euro 1.15 billion; preliminary estimates suggest grants for about 1 percentage point of GDP could be received in 2020. - COVID-19 containment and mitigation measures: - Prior to first contagion, increased hospitals’ budget and adopted WHO-recommended protocols in late February. - After first contagion, adopted measures including: (a) closing schools, universities, and restaurants; (b) banning all large events; (c) halting public transport; (d) imposing curfew; and (e) closing borders. Government urged work from home; SMEs and individuals affected can hold off on rent payments. - Fiscal package: - A package amounting to 1.4 percent of GDP has been proposed and largely implemented, entailing higher health spending and exceptional financial support. - Package components include: (a) a basic minimum income scheme to outbreak-related unemployed workers of small business; (b) increased social assistance and pension increases; (c) rescheduling of SMEs profit-tax in 2020; (d) a temporary credit sovereign guarantee to allow companies to pay wages to impacted workers. - Monetary and financial sector measures: - Bank of Albania lowered policy rate by 0.5 percentage points to 0.5 percent and adopted a fixed-price full-allotment approach to liquidity injection operations without relaxing collateral rules for the moment. - Authorities intend to use limited exchange rate intervention to counter possible disorderly domestic FX market conditions. - BoA amended credit risk management regulations to support credit supply; government and BoA allowed postponement of loan installment payments for entities and individuals facing difficulties. - The banking system has remained liquid and well capitalized. ### Fund support, financing needs, and external financing strategy - RFI role: RFI disbursement will be key to finance measures to fight the virus and limit economic and social costs, and to catalyze additional financing if planned Eurobond issuance is delayed due to market turmoil. - Eurobond consideration: authorities are considering issuing Eurobond amounting to Euro 500 million; timing depends on market evolution. - External partners: support from the Fund is expected to catalyze further funding by European Union, EBRD, and World Bank. - Engagement: authorities welcome proposed post-program monitoring as an opportunity for continued engagement with the Fund. - Staff view: fiscal and external positions remain fully sustainable as shown by the staff DSA; staff reached this conclusion even when assuming an unchanged primary balance at the 2020 level in a constant scenario reflecting large exceptional outlays. ### Key statistics and figures (preserved exactly as in source) - SDR 139.30 million - about euro 172 million - 100 percent of Albania’s quota under the Rapid Financing Instrument (RFI) - growth at 3.5 percent in 2020 - 51 lives (earthquake fatalities) - close to 7 percentage points of GDP (earthquake damage estimate) - Twelve thousand families - cases risen to 380 (as of April 7) - reconstruction cost estimated at 1.2 percent of GDP - donors’ pledges for Euro 1.15 billion - grants for about 1 percentage point of GDP (preliminary, 2020) - fiscal package amounting to 1.4 percent of GDP - policy rate lowered by 0.5 percentage points, to an all-time low of 0.5 percent - public debt-to-GDP ratio target: 60 percent by 2025 - Eurobond amounting to Euro 500 million *Source: Letter and statement from the Government of Albania and Bank of Albania to the IMF, April 10, 2020.* --- _Source: https://www.imf.org/-/media/files/publications/cr/2020/english/1albea2020001.pdf_