October 13, 2022
The International Monetary Fund (IMF) reported on Monday that it had increased its prediction for Albania’s economic growth in 2022 from 3% to 3.7% and encouraged the government to exercise caution in handling escalating risks and maintaining the strong growth momentum.
Following the conclusion of Article IV talks with Albania, the IMF stated in a news release that the country’s strong activity in the tourist, real estate, and services sectors will fuel economic development in 2022.
The IMF predicts that as a result of tighter financial conditions, the recession in Europe, and the required reduction of policy support, Albania’s GDP growth will fall to about 2% in 2023.
The international lender anticipates that Albania’s inflation will reach its high in the upcoming months and return to its objective of 3% by the middle of 2024.
In light of this, the IMF stated that additional monetary tightening is required to control inflation, stating that it anticipates the Bank of Albania to raise its policy rate to 3-3.5% in 2022 and 4-4.5% in 2023.
In order to boost Albania’s capacity for inclusive and sustainable growth, authorities must strengthen their efforts on structural reforms while keeping budgetary support limited in time and focused at the most vulnerable.
The IMF stated that improving public finances’ efficiency and credibility is still essential for sustaining market confidence and reducing rising borrowing costs.
Source: SEE NEWS
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