IMF Staff Country Reports

The 2024 Article IV Consultation discusses that the Albanian economy has turned in a strong performance in recent years, underpinned by prudent macroeconomic policies. Output is now well above its prepandemic trend thanks to a booming tourism sector. Prudent fiscal policies contributed to a remarkable reduction in public debt while proactive monetary policy, falling global commodity prices, and lek appreciation have facilitated disinflation. External imbalances have shrunk considerably. Systemic vulnerabilities in the financial system appear broadly contained. The banking sector remains well-capitalized and liquid with average prudential ratios well above regulatory requirements. The hard-earned gains on macroeconomic stability should be safeguarded, while deep structural reforms are needed to accelerate convergence. The groundwork for the introduction of a new property tax law—including the establishment of a fiscal cadaster—should be completed in a timely manner. Policies should focus on raising productivity by fostering integration in global value chains, removing barriers to firm growth such as distortionary tax incentives and hurdles to bank lending, promoting technology adoption and improving education and training.