IMF: Albania rapid economic growth, but may not last long

“Albania is enjoying one of the fastest economic growth in the region, while the growth rate is estimated to reach 3.9 percent in 2017 and 3.7 percent in 2018. Funding conditions are extremely favourable, while inflation rates and interest rates continue to be very low. Investment growth is accelerating, and trust continues to be high. Exports are growing, supported by the strong economic recovery of business partners from the EU. Bank of Albania currency reserves (BSH) are sufficient (over 6 months of coverage of imports) as inflows of foreign direct investment (IHD) follow at a steady pace. Although the recovery is still not supported by credit, the banking sector is stable, liquid and relevant. Forecast on Albania's economic growth remains positive, provided it accelerates the pace of reforms, boosts confidence and creates a favourable environment for new investments and an increase of”, the IMF's conclusion said.

But according to the IMF, the risk facing the Albanian economy is that this pace of economic growth may not last long.

EU growth has accelerated since 2016. But recovery of economic growth is generally cyclical and medium-term forecasting remains low due to unresolved problems that have left the crisis behind, poor productivity growth and demographic control factors. There are also global risks from a sudden correction of financial markets, political uncertainties, and protectionist policies that can lower trust and economic growth. The slowdown would negatively affect Albania through trade, investment and banking channels, the IMF statement said.

It further points out that it is the right moment to speed up reforms to soften these risks and to create shields on undesirable shocks in the future.

IMF Complete Declaration