## Albania: 2024 Staff Visit Press Release _IMF News, July 15, 2024_ ## Source details **Canonical URL:** [Albania: 2024 Staff Visit Press Release](https://www.imf.org/en/news/articles/2024/07/14/pr-24274-albania-2024-staff-visit-press-release) ## Other formats - [Markdown version](/en/news/articles/2024/07/14/pr-24274-albania-2024-staff-visit-press-release/index.md) - [Structured JSON version](/en/news/articles/2024/07/14/pr-24274-albania-2024-staff-visit-press-release/index.json) - [Bundle manifest](/en/news/articles/2024/07/14/pr-24274-albania-2024-staff-visit-press-release/bundle-manifest.json) ## Bibliographic details - Published: July 15, 2024 --- ### Mission and context - Press Release No. 24/274; July 15, 2024. - An International Monetary Fund (IMF) team led by Ms. Anke Weber conducted a staff visit to Albania during July 9-12, 2024, to discuss recent macroeconomic developments, the economic outlook, and policy priorities. - The views expressed are those of IMF staff and do not necessarily represent the views of the IMF’s Executive Board. This mission will not result in a Board discussion. - IMF Communications Department media contact: PRESS OFFICER: Eva Graf; Phone: +1 202 623-7100; Email: MEDIA@IMF.org; @IMFSpokesperson. ### Macroeconomic performance and outlook - Albania grew by 3.5 percent in 2023, led by resilient private consumption, with notable strength in tourism and construction activity. - Fiscal and external sector performance in 2023: - primary surplus of 0.7 percent of GDP. - current account deficit of 1 percent of GDP. - Inflation and recent developments: - headline inflation declined to 2.1 percent in June, on the back of declining commodity prices. - Near-term projection: - The economy is expected to maintain its positive momentum in 2024, with growth projected at around 3¼ percent. - Inflation is expected to gradually converge back to the 3 percent target. ### Risks and scenarios - Risks are described as broadly balanced. - Upside risk: - Stronger-than-expected tourism activity. - Downside risks: - Heightened geopolitical tensions as a major potential headwind. - Vulnerabilities to weather-related energy sector shocks. - Risk of a sudden exchange rate reversal. - Demographic trends represent a key downside risk in the medium term. - Reform-related upside: - Progress on reforms under the new EU growth plan for the Western Balkans could boost potential growth. ### Fiscal policy, debt, and budgetary framework - Key emphasis: - Importance of rebuilding adequate fiscal buffers to ensure continued resilience to future shocks. - Welcome for authorities’ commitment to a prudent fiscal policy and early and continued compliance with the fiscal rules under the Organic Budget Law. - Recommended fiscal strategy: - Ambitious medium-term fiscal consolidation and prudent debt management to reduce gross financing needs and safeguard fiscal sustainability. - Consolidation should be supported by measures to boost revenue mobilization, generate efficiency gains, and raise productive spending. - Fiscal framework and transparency: - Continued progress in fiscal reforms is critical for the credibility of the fiscal framework. - Expectation for adoption of the Medium-Term Revenue Strategy by the end of this year. - Welcome for adoption of the Public Finance Management Strategy and call for full operationalization of a strengthened public investment management framework. - Support for further progress in public-private partnership (PPP) reforms. - Completion and issuance of the 2022 and 2023 annual reports on PPPs and concessions are welcome; timely publication of future reports is encouraged. - The pilot standalone Fiscal Risk Statement is a key step in bolstering fiscal risk management. - Concrete progress on enhancing governance and oversight of state-owned enterprises continues to be crucial for safeguarding fiscal sustainability. ### Revenue mobilization and tax policy - Tax system goals: - A tax system underpinned by comprehensive coverage, fair rules, and the right incentives to ensure an equitable burden among taxpayers. - Recent measures and priorities: - The new income tax law helped make the taxation system fairer and more evenhanded by ensuring that free professionals would be taxed in a manner comparable to other employed taxpayers. - Revenue mobilization measures to increase the tax base, including property tax reforms, remain important. ### Monetary policy and financial sector resilience - Monetary stance: - The current monetary stance is appropriate; price pressures from wage increases likely to be tempered by lower imported inflation due to an appreciated lek. - Authorities should continue to monitor price developments closely and maintain a data-dependent approach to monetary policy. - A floating exchange rate should be the main shock absorber. - Financial sector policies: - Continued nimble supervision and enhanced prudential tools will help tide the economy through financial and economic uncertainties. - Progress on financial reforms should continue, including further bolstering supervisory and regulatory frameworks and deepening financial markets. - Against the backdrop of strong credit growth, the Bank of Albania’s recent decision to increase the countercyclical capital buffer is appropriate. - Introducing a systemic risk buffer could further enhance resilience. - Efforts to strengthen consumer protection regulation, including for non-bank financial institutions, are key to preserving the integrity of, and trust in, the financial system. - With more than a decade having lapsed since the last Financial System Stability Assessment, the authorities are encouraged to consider a new Financial Sector Assessment Program. - Preserving the independence of the Bank of Albania is crucial to safeguarding price and financial stability. ### Closing and next steps - The IMF team expressed appreciation for constructive discussions and exchanges with the authorities and other counterparts in Albania. - The IMF mission for the 2024 Article IV consultation is expected to take place in November. *International Monetary Fund: Albania: 2024 Staff Visit Press Release (Press Release No. 24/274), July 15, 2024.* --- ## Content in this bundle - **Shqipëri: Njoftimi për Shtyp i Vizitës së Stafit për vitin 2024** - [Shqipëri: Njoftimi për Shtyp i Vizitës së Stafit për vitin 2024 (Markdown version)](/-/media/files/news/press-release/2024/pr24274-alb-njoftim-per-shtyp-per-viziten-e-stafit-2024.pdf.md){rel="alternate" type="text/markdown"} - [Shqipëri: Njoftimi për Shtyp i Vizitës së Stafit për vitin 2024 (PDF)](/-/media/files/news/press-release/2024/pr24274-alb-njoftim-per-shtyp-per-viziten-e-stafit-2024.pdf){rel="external" type="application/pdf"} --- ## References - [Albania and the IMF](http://www.imf.org/external/country/alb/index.htm) - [Press Releases](https://www.imf.org/en/news/searchnews) - [PRESS CENTER](http://presscenter.imf.org/) - [https://www.imf.org/en/home](https://www.imf.org/en/home) _Source: https://www.imf.org/en/news/articles/2024/07/14/pr-24274-albania-2024-staff-visit-press-release_