IMF: No Greek scenario for Albania

“We have heard a lot about a Greek scenario in Albania. I think that one should be careful when comparing two countries, especially now that the Greek economy is coming out of recession. There are huge differences. Greece had larger imbalances than Albania. Albania has a much lower debt than Greece, and the fiscal consolidation that is needed is much smaller. Let’s not forget that the Albanian economy has a huge potential to grow. There is a flexible work market and with a low price of labor. There is a small public sector and Albania doesn’t have the limitations that the Greek economy had”, declared the Chief of the Mission, Nadeem Ilahi.

According to the International Monetary Fund, the signals show that the economic growth has already started. Ilahi says that this is seen in a series of indicators.

“We are seeing good signs in the performance of revenues, especially VAT. It is early to say if this will be stable during the entire year. Sings show that the economy is turning, especially now that the VAT is performing well. This is probably the start of a positive trend. We have an improved market with imports and exports as well. Exports like textiles are also recovering. The external economic factor is improving, together with the internal consumer trust, together with that of investors, due to the reforms and the business climate”, Ilahi declared.

The IMF also values that the economy will have a 2.1% growth this year, compared to the 0.44% it was in the past year. But the debt remains a concern and the International Monetary Fund suggests other tax interventions in the next budget.

“We don’t see the need for additional measures this year. As you know, we have a three-year program with the government, which fioresees three rounds of fiscal consolidation. In the next year we will need a budget that keeps this in mind. We have discussed with the government about the taxes that needed intervention in September, when the budget of 2014 was drafted. We set a number of measures on the table, from which the government will chose. The menu is still there. Our stance for the government is that there is the need for a fiscal consolidation. You decide if you will reach this”, Ilahi declared.

Taxes for citizens and the business increased with 200 million USD this year. How much thinks the IMF that the new burden should be for the next year?

“It is difficult to tell now. My impression is that it will be something smaller than this year. But this will be decided later, after we see the fiscal position of our country. If the revenues have a good progress and if the spending is kept low, the consolidation measure will change”, Ilahi declared.

The International Monetary Fund values the start of the pension reform. They underline that the increase of public administration salaries for the next three years remains an open discussion.

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