IMF: Albania enjoys economic growth, but public debt may slow it down

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IMF: Albania enjoys economic growth, but public debt may slow it down
The Albanian economy continues to strengthen, with real GDP growth at 3.8% during 2017, but it needs to be careful, because public debt may slowdown its progressive growth. This is the new appeal that the International Monetary Fund has issued for Albania in its First Post Monitoring Assessment. “Despite the favorable environment and positive short-term outlook, risks and vulnerabilities remain, emanating from high public debt”,  IMF says, adding that the strong economic growth that Albania is enjoying, may not last without a significant push for structural reforms.  Here, the IMF suggests that public debt should be kept under control, although it admits that public debt is dropping.  “Public debt remains high. Addressing fiscal risks posed by the high level of public debt and the related financing needs remains a high priority. This requires more fiscal adjustment, preferably in the near term.

Public debt management should focus on lengthening the maturity of public debt and diversifying the investor base, while avoiding risks posed by excessive non-concessional FX borrowing”, is the recommendation made by experts of the International Monetary Fund for Albanian authorities. Meanwhile, IMF also mentions the so called PPPs or Private-Public Partnerships. “The impact of PPPs on the fiscal medium-term budget framework and debt sustainability should be carefully assessed”, the IMF appeals. Meanwhile, experts of this institution also suggest that “MoF should enhance the fiscal recording, and legal, financial and economic analysis of PPP projects and ensure proper implementation of the PPP framework”, concluding that if these problems are not addressed and structural reforms are not implemented, economic growth of the country may slow down.

 

 

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