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IMF report, economic growth for Albania drops to 5 percent, forecast gloomy year due to pandemic

IMF report, economic growth for Albania drops to 5 percent, forecast gloomy year

The International Monetary Fund gives non-optimistic signals for Albania regarding this year. According to the report "National Economic Statement 2021", published yesterday by the IMF, economic growth for 2021 is projected at 5%, from 6.1% estimated in the report published in October. This indicator expresses the gloomy forecast for our economy and all this comes due to the pandemic. The IMF had predicted a difficult recovery for our country before, but yesterday it reduced the expectations to start this recovery after isolation, as long as the pandemic continues to be on its feet, at a much higher rate than in March. of last year. "For 2021, the expectation for the economic performance of Albania has been revised downwards to + 5%, from + 6.1% that was shown in the data of October 2020. The country's economic recovery will be very slow due to this unprecedented uncertainty brought about by the pandemic. In the event of a more severe pandemic, authorities will need to take new measures to ensure adequate health care delivery and to protect those most in need, identifying opportunities for budget redistribution and additional funding and keeping liquid internal financial market. "The authorities must remain ready to take these measures as well as other measures that may be necessary, while maintaining macroeconomic stability," the report said. The IMF clarifies that, in order to keep the economy stable and not declining, the Albanian government should focus on resuming a modest fiscal consolidation during 2021, which should be further strengthened, based on a sound medium-term revenue strategy. According to the Fund, economic risks have increased due to the crisis that continues to hold pandemics in neighboring countries, with which Albania is closely related.

IMF Recommendations

Through this report, the IMF has listed a number of recommendations that need to be implemented to keep the economy at least stable. The fund urges the government not to incur unnecessary expenditures, at least in the first six months of the year, to see how the pandemic will go. It is also required several times in a row to keep PPP monitored and reduce arrears. "During 2021, the authorities need to limit non-priority spending, to create room for sufficient spending on pandemic-related health care and social protection for the most vulnerable groups, and to maintain a significant level of liquidity as a reserve." as the risks to the activity tend mainly downward. We reiterate our call for a unified preparation process, prioritization and evaluation of all public investment projects, including Public Private Partnerships ”, the report states. Among other things, the Fund emphasizes that during 2021 efforts should be increased to improve liquidity and debt management. The IMF urges that the decline in public debt, even on a small scale, begin this year. "The budget should try to achieve a modest decrease in the level of debt. "Further progress in the field of recreating room for maneuver with budget policy through reducing the fiscal deficit should be embodied in a credible medium-term budget program," the report notes. The fund emphasizes that increasing fiscal revenues is critical to supporting the higher spending needs of people and the economy. While it is evident that,