PRESS RELEASE
Questions and answers at the Governor's press conference on 9 November 2016

Question: The IMF Arrangement will be reviewed next February. There are thoughts about repositioning this arrangement at advisory levels. Do you think it is the right moment to move to these levels and does that support the Bank's policies, and for inflation as well?

Governor- The three-year arrangement with the International Monetary Fund ends in February 2017, and has produced its positive effects. In this regard, a series of structural reforms, both for the economy in general and the financial sector in particular, have provided successful results. Due to the arrangement with the IMF and the measures and structural reforms in Albania, we have moved towards fiscal consolidation. Practically, the arrangement is a prerogative of the Government of Albania. In concrete terms, we will have to probably wait and see, until after the next year's elections, about the continuation of the arrangement. We will, therefore, have a more thorough judgement on the type of the arrangement, after the elections due next year.

Normally, before the end of the arrangement, there is a discussion, expected next January, with the IMF reviewing the updated economic data in Albania and, we will have a more thorough judgement. We believe, based on figures, that this was a successful arrangement. About the continuation of the arrangement, we will have to wait until after the elections. This is a prerogative of the Government of Albania.

We have proven that we are capable of carrying out reforms in the economy and in the financial system, both the Government and the Bank of Albania. These reforms have produced successful results and, in the event we continue with the same trend of reforms, the premises will be positive for the development of the Albanian economy.

Question: The draft budget for the next year was presented today at the conference of parliamentary group chairs.. Is the Bank of Albania informed on the draft and does it meet budget parameters, will investments and consumption be higher?

Governor: The Bank of Albania has taken part in discussions with the Ministry of Finance and the International Monetary Fund during the preparations for the 2017 budget; however, we do not have a final text of it. You know already about some of its key elements such as the rise in wages and pension payments, which was also stated in the press conference by the Minister of Finance and representatives of the International Monetary Fund.

Overall, the draft budget continues to aim at fiscal consolidation. This is what the Bank of Albania has also been heedful: the draft budget should continue to ensure fiscal consolidation, which means a reduction in the public debt level. From what we have seen so far, the draft budget achieves this goal. As we have stated in our previous press conference, the rise in wages and pension payments would be a positive element that would contribute to higher consumption and investments, thus having a positive impact on the country's economy. A combination of these two elements, that is maintaining the reduction of the public debt level through fiscal consolidation and increase in consumption and investments, would be, in our view, a positive approach. If the 2017 draft budget maintains these equilibriums and achieves these objectives, then it will definitely be acceptable for the Bank of Albania. Nevertheless, we are waiting on the final version of the draft budget.