{
  "title": "IMF Executive Board Concludes 2018 Article IV Consultation with Albania",
  "publication": "IMF News, January 28, 2019",
  "sourceUrl": "https://www.imf.org/en/news/articles/2019/01/28/pr1919-albania-imf-executive-board-concludes-2018-article-iv-consultation",
  "canonical": "https://www.imf.org/en/news/articles/2019/01/28/pr1919-albania-imf-executive-board-concludes-2018-article-iv-consultation",
  "overlayPath": "/en/news/articles/2019/01/28/pr1919-albania-imf-executive-board-concludes-2018-article-iv-consultation/index.md",
  "summary": "Executive Board concluded the 2018 Article IV Consultation with Albania on January 23, 2018.",
  "publishDate": "2019-01-28",
  "sections": [
    {
      "heading": "Overview and recent developments",
      "content": "- Executive Board concluded the 2018 Article IV Consultation with Albania on January 23, 2018.\n- Growth is estimated at 4.2 percent in 2018 and is projected to stay close to this level over the medium term.\n- Exchange rate appreciated sharply since March 2018, putting downward pressure on inflation.\n- Inflation is expected to rise gradually to reach its 3 percent target by 2021.\n- In October, the authorities issued a €500 million Eurobond with a seven-year maturity at a rate of 3.50 percent.\n- Current account deficit expected to narrow to around 6 percent of GDP over the medium term as large energy projects taper off.\n- Non-performing loan (NPL) ratio lowered to about 13 percent, but pockets of vulnerability remain."
    },
    {
      "heading": "Growth, inflation, and external sector",
      "content": "- Real GDP growth: 4.2 percent in 2018; projected 3.7 percent in 2019 and 3.9 percent in 2020.\n- Domestic demand contribution to 2018 growth: 4.4 (percentage points).\n- Consumption growth: 2.3 in 2018; projected 2.7 in 2019 and 2.9 in 2020.\n- Investment (incl. inventories and stat. disc) contribution to growth: 0.3 in 2018; 0.0 in 2019.\n- External demand contribution: negative in 2018 (implied from totals).\n- Consumer Price Index (avg.) series: 1.6 (2014), 1.9 (2015), 1.3 (2016), 2.0 (2017).\n- Consumer Price Index (eop) reported for 2018 (value not provided in text excerpt beyond header).\n- GDP deflator: 0.6 (2014), -0.4 (2015), 1.4 (2016), 2.1 (2017).\n- Trade balance (goods and services) as percent of GDP: -13.1 in 2018; projected -12.5 in 2019; -12.0 in 2020.\n- Current account balance as percent of GDP: -6.3 in 2018; projected -6.0 in 2019; -5.8 in 2020.\n- Gross international reserves: reported in months of imports and in billions of Euros (series: 7.0, 6.5, 6.7 for recent years)."
    },
    {
      "heading": "Fiscal policy, revenues, and public debt",
      "content": "- Fiscal stance broadly neutral in 2018; without additional measures fiscal deficit expected to hover around 2 percent of GDP in the medium term.\n- Total Revenues and grants: 27.2 in 2018.\n- Tax revenue: 25.4 in 2018; 25.2 projected 2019; 25.1 projected 2020.\n- Total Expenditure: 29.0 in 2018; projected 29.3 in 2019; 29.1 in 2020.\n- Overall balance: -1.9 in 2018.\n- Primary balance and interest series reported in table headings (specific year values: Primary 28.3, 26.8, 27.1, 27.0 for earlier years; Interest and Primary balance entries partially tabulated).\n- Financing composition: financing and of which domestic/foreign entries shown in table (values include 5.9, 4.6, 1.7 for financing across years; domestic -1.3, -0.8, 1.0; foreign 3.1).\n- General Government Debt (percent of GDP): 68.6 in 2018; 65.1 projected 2019; 63.3 projected 2020.\n  - Domestic debt: 33.7 in 2018; 32.1 projected 2019.\n  - External debt: 31.2 in 2018 (series shows 34.3, 32.9, 31.9, 31.4, 31.2 for earlier years)."
    },
    {
      "heading": "Financial sector and monetary policy",
      "content": "- Banking system is well-capitalized and liquid; credit provision to support business investments has remained weak.\n- Non-performing loan (NPL) ratio reduced to about 13 percent.\n- Broad money growth: 4.0 (2014), 4.9 (2015) (series continues for later years).\n- Private credit growth: -2.8 (2014), 0.4 (2015), 3.6 (2016) (series continues).\n- Directors agreed accommodative monetary policy stance remains appropriate; normalization should be data dependent, aimed at reaching the inflation target over the medium term.\n- Authorities committed to maintain exchange rate flexibility; interventions should be temporary and limited to preventing disorderly market conditions and a destabilization of inflation.\n- Directors urged measures to address credit growth bottlenecks, expedite de-euroization measures, and tackle structural weaknesses in credit provision, including continued high NPLs.\n- Strengthening property rights and insolvency regimes recommended to support credit recovery.\n- Directors emphasized strengthening financial supervision and enhancing the AML/CFT framework."
    },
    {
      "heading": "Risks and vulnerabilities",
      "content": "- Medium-term risks tilted to the downside.\n- External risks: Albania strongly exposed to slowing growth in Europe (main trading partners); downturn could reduce exports, remittances, and foreign direct investment.\n- Financial risk: expected tightening in global financial conditions would raise Albania’s cost of financing.\n- Domestic risks: high public debt; low domestic savings; absence of large institutional investors increases dependence on foreign financing.\n- Increasing reliance on PPPs for infrastructure projects has resulted in rising contingent liabilities.\n- Drought impact on electricity generation creates fiscal risks.\n- Directors highlighted need to halt persistent build-up of government arrears which hurt private activity and trust in public sector."
    },
    {
      "heading": "Executive Board assessment and policy recommendations",
      "content": "- Directors welcomed Albania’s continued economic growth and urged using the favorable environment to:\n  - Further advance policies and structural reforms to entrench macroeconomic stability, build buffers, and foster sustainable and inclusive growth.\n  - Implement additional fiscal consolidation to build stronger buffers; lower the fiscal deficit further and accelerate public debt reduction, including through stronger revenue measures.\n  - Achieve a simple, predictable tax system; focus on broadening the tax base and avoid ad‑hoc tax measures that create distortions.\n  - Contain fiscal risks from PPPs; consolidate and strengthen public investment decision‑making; ensure value for money for PPPs through competitive bidding.\n  - Halt the build‑up of government arrears through determined measures.\n  - Continue accommodative, data‑dependent monetary policy toward the inflation target; maintain exchange rate flexibility.\n  - Address bottlenecks to credit growth and improve monetary transmission.\n  - Expedite de‑euroization measures and address high NPLs.\n  - Strengthen property rights and insolvency regimes.\n  - Strengthen financial supervision and enhance AML/CFT framework.\n  - Undertake resolute structural reforms to improve the business climate, with emphasis on strengthening the rule of law, completing judicial reform, and strengthening anti‑corruption efforts.\n  - Reduce informality by maintaining a simple and fair tax system, sustaining improvements in tax collection, and increasing the quality of public services."
    },
    {
      "heading": "Selected economic indicators (highlights from table)",
      "content": "- Real GDP growth: 1.8 (2014); 2.2 (2015); 3.3 (2016); 3.8 (2017); 4.2 (2018); 3.7 (2019 proj.); 3.9 (2020 proj.).\n- Foreign savings (percent of GDP): 10.8 (2014); 8.6 (2015); 7.6 (2016); 7.5 (2017); 6.3 (2018); 6.0 (2019); 5.8 (2020).\n- National savings (percent of GDP): 15.9 (2014); 15.8 (2015); 17.0 (2016); 17.4 (2017); 17.9 (2018); 18.1 (2019).\n- Investment (incl. inventories and stat. disc.) (percent of GDP): 26.7 (2014); 24.4 (2015); 24.5 (2016); 24.9 (2017); 24.2 (2018); 23.9 (2019).\n- Trade balance (goods and services) (percent of GDP): -19.0 (2014); -17.3 (2015); -16.8 (2016); -15.1 (2017); -13.1 (2018).\n- Current account balance (percent of GDP): -10.8 (2014); -8.6 (2015); -7.6 (2016); -7.5 (2017); -6.3 (2018).\n- General Government Debt (percent of GDP): 72.0 (2014); 73.9 (2015); 73.3 (2016); 71.9 (2017); 68.6 (2018).\n- Nominal GDP (in billions of lek): 1395 (2014); 1431 (2015); 1473 (2016); 1551 (2017); 1649 (2018); 1748 (2019); 1860 (2020).\n- Output Gap (percent): -1.5 (2014); -1.8 (2015); -1.4 (2016); -0.7 (2017); -0.2 (2018).\n\nIMF Communications Department. Press Release No. 19/19. January 28, 2019.\n\n---\n\n\n References\n\n- https://www.imf.org/-/media/images/imf/bios/imfboard.jpg\n- The Executive Board\n- Albania and the IMF\n- IMF Policy Advice -- A Factsheet\n- Press Releases\n- PRESS CENTER\n- http://www.imf.org/external/np/sec/misc/qualifiers.htm\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2019/01/28/pr1919-albania-imf-executive-board-concludes-2018-article-iv-consultation"
    }
  ],
  "bullets": [
    "[Markdown version](/en/news/articles/2019/01/28/pr1919-albania-imf-executive-board-concludes-2018-article-iv-consultation/index.md)",
    "[Structured JSON version](/en/news/articles/2019/01/28/pr1919-albania-imf-executive-board-concludes-2018-article-iv-consultation/index.json)",
    "[Bundle manifest](/en/news/articles/2019/01/28/pr1919-albania-imf-executive-board-concludes-2018-article-iv-consultation/bundle-manifest.json)",
    "Published: January 28, 2019",
    "Executive Board concluded the 2018 Article IV Consultation with Albania on January 23, 2018.",
    "Growth is estimated at 4.2 percent in 2018 and is projected to stay close to this level over the medium term.",
    "Exchange rate appreciated sharply since March 2018, putting downward pressure on inflation.",
    "Inflation is expected to rise gradually to reach its 3 percent target by 2021.",
    "In October, the authorities issued a €500 million Eurobond with a seven-year maturity at a rate of 3.50 percent.",
    "Current account deficit expected to narrow to around 6 percent of GDP over the medium term as large energy projects taper off.",
    "Non-performing loan (NPL) ratio lowered to about 13 percent, but pockets of vulnerability remain.",
    "Real GDP growth: 4.2 percent in 2018; projected 3.7 percent in 2019 and 3.9 percent in 2020.",
    "Domestic demand contribution to 2018 growth: 4.4 (percentage points).",
    "Consumption growth: 2.3 in 2018; projected 2.7 in 2019 and 2.9 in 2020.",
    "Investment (incl. inventories and stat. disc) contribution to growth: 0.3 in 2018; 0.0 in 2019.",
    "External demand contribution: negative in 2018 (implied from totals).",
    "Consumer Price Index (avg.) series: 1.6 (2014), 1.9 (2015), 1.3 (2016), 2.0 (2017).",
    "Consumer Price Index (eop) reported for 2018 (value not provided in text excerpt beyond header).",
    "GDP deflator: 0.6 (2014), -0.4 (2015), 1.4 (2016), 2.1 (2017).",
    "Trade balance (goods and services) as percent of GDP: -13.1 in 2018; projected -12.5 in 2019; -12.0 in 2020.",
    "Current account balance as percent of GDP: -6.3 in 2018; projected -6.0 in 2019; -5.8 in 2020.",
    "Gross international reserves: reported in months of imports and in billions of Euros (series: 7.0, 6.5, 6.7 for recent years).",
    "Fiscal stance broadly neutral in 2018; without additional measures fiscal deficit expected to hover around 2 percent of GDP in the medium term.",
    "Total Revenues and grants: 27.2 in 2018.",
    "Tax revenue: 25.4 in 2018; 25.2 projected 2019; 25.1 projected 2020.",
    "Total Expenditure: 29.0 in 2018; projected 29.3 in 2019; 29.1 in 2020.",
    "Overall balance: -1.9 in 2018.",
    "Primary balance and interest series reported in table headings (specific year values: Primary 28.3, 26.8, 27.1, 27.0 for earlier years; Interest and Primary balance entries partially tabulated).",
    "Financing composition: financing and of which domestic/foreign entries shown in table (values include 5.9, 4.6, 1.7 for financing across years; domestic -1.3, -0.8, 1.0; foreign 3.1).",
    "General Government Debt (percent of GDP): 68.6 in 2018; 65.1 projected 2019; 63.3 projected 2020.",
    "Banking system is well-capitalized and liquid; credit provision to support business investments has remained weak.",
    "Non-performing loan (NPL) ratio reduced to about 13 percent.",
    "Broad money growth: 4.0 (2014), 4.9 (2015) (series continues for later years).",
    "Private credit growth: -2.8 (2014), 0.4 (2015), 3.6 (2016) (series continues).",
    "Directors agreed accommodative monetary policy stance remains appropriate; normalization should be data dependent, aimed at reaching the inflation target over the medium term.",
    "Authorities committed to maintain exchange rate flexibility; interventions should be temporary and limited to preventing disorderly market conditions and a destabilization of inflation.",
    "Directors urged measures to address credit growth bottlenecks, expedite de-euroization measures, and tackle structural weaknesses in credit provision, including continued high NPLs.",
    "Strengthening property rights and insolvency regimes recommended to support credit recovery.",
    "Directors emphasized strengthening financial supervision and enhancing the AML/CFT framework.",
    "Medium-term risks tilted to the downside.",
    "External risks: Albania strongly exposed to slowing growth in Europe (main trading partners); downturn could reduce exports, remittances, and foreign direct investment.",
    "Financial risk: expected tightening in global financial conditions would raise Albania’s cost of financing.",
    "Domestic risks: high public debt; low domestic savings; absence of large institutional investors increases dependence on foreign financing.",
    "Increasing reliance on PPPs for infrastructure projects has resulted in rising contingent liabilities.",
    "Drought impact on electricity generation creates fiscal risks.",
    "Directors highlighted need to halt persistent build-up of government arrears which hurt private activity and trust in public sector.",
    "Directors welcomed Albania’s continued economic growth and urged using the favorable environment to:",
    "Real GDP growth: 1.8 (2014); 2.2 (2015); 3.3 (2016); 3.8 (2017); 4.2 (2018); 3.7 (2019 proj.); 3.9 (2020 proj.).",
    "Foreign savings (percent of GDP): 10.8 (2014); 8.6 (2015); 7.6 (2016); 7.5 (2017); 6.3 (2018); 6.0 (2019); 5.8 (2020).",
    "National savings (percent of GDP): 15.9 (2014); 15.8 (2015); 17.0 (2016); 17.4 (2017); 17.9 (2018); 18.1 (2019).",
    "Investment (incl. inventories and stat. disc.) (percent of GDP): 26.7 (2014); 24.4 (2015); 24.5 (2016); 24.9 (2017); 24.2 (2018); 23.9 (2019).",
    "Trade balance (goods and services) (percent of GDP): -19.0 (2014); -17.3 (2015); -16.8 (2016); -15.1 (2017); -13.1 (2018).",
    "Current account balance (percent of GDP): -10.8 (2014); -8.6 (2015); -7.6 (2016); -7.5 (2017); -6.3 (2018).",
    "General Government Debt (percent of GDP): 72.0 (2014); 73.9 (2015); 73.3 (2016); 71.9 (2017); 68.6 (2018).",
    "Nominal GDP (in billions of lek): 1395 (2014); 1431 (2015); 1473 (2016); 1551 (2017); 1649 (2018); 1748 (2019); 1860 (2020).",
    "Output Gap (percent): -1.5 (2014); -1.8 (2015); -1.4 (2016); -0.7 (2017); -0.2 (2018).",
    "[https://www.imf.org/-/media/images/imf/bios/imfboard.jpg](https://www.imf.org/-/media/images/imf/bios/imfboard.jpg)",
    "[The Executive Board](https://www.imf.org/external/np/sec/memdir/eds.aspx)",
    "[Albania and the IMF](http://www.imf.org/external/country/alb/index.htm)",
    "[IMF Policy Advice -- A Factsheet](https://www.imf.org/en/about/factsheets/imf-surveillance)",
    "[Press Releases](https://www.imf.org/en/news/searchnews)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[http://www.imf.org/external/np/sec/misc/qualifiers.htm](http://www.imf.org/external/np/sec/misc/qualifiers.htm)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
  ],
  "alternates": {
    "markdown": "/en/news/articles/2019/01/28/pr1919-albania-imf-executive-board-concludes-2018-article-iv-consultation/index.md",
    "json": "/en/news/articles/2019/01/28/pr1919-albania-imf-executive-board-concludes-2018-article-iv-consultation/index.json",
    "bundleManifest": "/en/news/articles/2019/01/28/pr1919-albania-imf-executive-board-concludes-2018-article-iv-consultation/bundle-manifest.json"
  },
  "generatedAtUtc": "2026-09-25T22:29:00.115Z"
}