IMF reduces economic growth prediction, less than 3% in 2015

“There are mainly external factors, such as the oil price drop and the problems in the Eurozone, especially Greece, but not only. These might shrink remittances and even exports. So far we have kept the 3% evaluation, but the next mission will come soon to Tiraa and I expect this prediction to drop. However, it will be without any dramatic change. This means that despite the negative effects, the economy is still growing”, Reinke declared.

IMF believes that the increased external risks might get balanced by the growth of the internal trust. According to Reinke, the government needs to continue the reforms, increase the residence of the economy and address the internal risks, such as the property bill, turned into a nightmare for everyone.

“This is a very complex situation that connects legal problems such as the finding of the legal owners. There are also economic issues, such as the evaluation of the land and the compensation magnitude. We don’t have a formula for this and it is not our role. Our view is that the property compensation puts in risk the fiscal perspective of our country. We want the government to resolve this. They must bring this danger and any other cost within the reasonable books, as they did with the energy. You remember that the energy subventions were left outside the budget”, Rainke declared.

Another question mark for the economy is the progress of loans, which remains weak, although it has returned into a positive territory, and this is due to the bad loans. The Government, the Bank of Albania and the IMF seem unprepared for this, while the main mechanism that has been proposed, that of postponing the debts, has not worked as expected.

“Maybe the bad loans would have been higher if the budget would have not paid the old debts. However, 40 billion ALL have really been paid. But we must keep in mind that not everything has gone to companies or individuals who had bad loans. There is no direct connection, for every ALL of paid obligation to reduce bad loans with the same price. I think that we must continue to follow the history. We have appealed the government and the Bank of Albania to investigate this case, because the bad loans are still high and the mechanism for paying the old debts did not work to reduce them as foreseen by the government and the Central Bank”, declared the Head of the Office in Tirana.

Despite the slow recovery of the growth, it seems that 2015 will be a difficult year for the economy. But the IMF keeps preserving optimistic tones for the future, by preventing a return of the growth with more than 4.5% within three years.

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