The IMF said today that “the high income that came to Albania’s budget from tourism and construction brings the moment for the government to start structural reforms so that economic growth produces more well-being”.
The world financiers added in their report that Albania is facing difficulties in closing the income gap with EU countries, as informality, non-functioning of the rule of law and demographic pressure have inhibited productivity.
The main focus should be on maintaining human capital, by improving education, the labor market and investing in digital skills.
The IMF officials also called for a reassessment of state PPP contracts and the financial risks they entail.
The Albanian government is urged not to have fiscal facilities and to remove the preferential tax treatments of some sectors. In this way, the public debt will also be able to decrease to the level of 45%, to enable more space for investments.
Meanwhile, for the energy sector, it is suggested to revise and increase the tariffs, “setting new tariffs that reflect the real costs”, while according to them, “the population layers in need should be supported with subsidies”.
For the banking sector, it is estimated that it faces “residual risks from the large role of securities, and exposure to the real estate sector”.
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