IMF raises concern, Albania between aging and rapid emigration

2025-01-27 12:41:00, Aktualitet CNA

IMF Executive Directors have drawn conclusions on Albania's performance during 2024.

Their conclusions highlight economic growth driven by tourism. On the other hand, they point to a rapidly aging population and identify widespread migration, low productivity and governance shortcomings as risks. They stress the importance of maintaining macroeconomic stability by advancing reforms to accelerate convergence with the EU and promote sustainable and inclusive growth.

The IMF also considers that maintaining a modest annual primary surplus alongside continued efforts to strengthen debt management would reinforce fiscal sustainability. While welcoming progress in the authorities' medium-term revenue strategy, they stressed that sustained reforms of revenue administration and tax policies will be needed to address rising spending needs.

They also emphasized that public investment and fiscal risk management reforms, particularly regarding state-owned enterprises and public-private partnerships, remain critical for fiscal transparency.

The IMF added that continued supervisory vigilance is vital given pockets of vulnerability in the financial sector related to credit growth in the real estate sector, as well as large exposures of bank borrowers and sovereigns. They encouraged the authorities to ensure strict regulatory compliance and greater alignment with EU standards and to improve the macroprudential toolkit. Deepening financial markets and improving supervision of non-bank financial institutions are key to enhancing resilience and preserving integrity.

They also underlined that deeper reforms are needed to maximize the benefits of the EU accession process. Policies should focus on increasing productivity by fostering global value chain integration, removing barriers to firm growth, and promoting access to bank lending.

Further efforts to update education and training programs, advance the digital agenda, boost female labor force participation, and diversify renewable energy sources would also be important. Directors emphasized that continued investment in infrastructure and governance reforms – including the implementation of the Anti-Corruption Strategy 2024–30 and further implementation of international AML/CFT standards – are key priorities./ CNA