Albania’s Economy May Shrink 7.5% in 2020, IMF Says

Albania’s Economy May Shrink 7.5% in 2020, IMF Says

TIRANA, September 29

The International Monetary Fund (IMF) projected a 7.5 percent decline of the Albanian economy in 2020. This and other findings were published on the IMF’s Statement of the first post-program monitoring Mission.
According to the statements, the coronavirus impact on the economy, which depends on tourism and remittances, and the earthquake of November 2019 are the main factors for the IMF’s gloomy economic forecast. However, the main findings of the report highlight expectations for economic recovery during the second half of 2020.
Moreover, the statement points out that the fiscal deficit is projected to rise to about seven percent of GDP and the public debt to slightly above 80 percent of GDP at end-2020.

“During 2021, the authorities should contain non-priority spending to make room for adequate health care provision for the pandemic and social protection for the most vulnerable, and maintain sizable liquidity for contingency, as the risks to activity are mainly to the downside. Continued earthquake reconstruction must be based on a robust institutional framework with transparency and accountability,” the statement points out.
Further on, the IMF repeated its advice against a possible tax amnesty, given concerns about its impact on tax compliance as well as money laundering and governance risks.
In the meantime, the statement considers the Albanian tax system complex and fragmented. Instead, a fairer, simpler, more efficient, and more transparent tax system can boost revenue mobilization while also improving the investment climate and reducing informality.
In the end, the IMF does not exclude the need for new measures to ensure adequate health care provision and protect those most in need in case of a more severe pandemic.

The Albanian version of the statement is available here albania-staff-concluding-statement


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