PRESS RELEASE
Governor Sejko: Online meeting with the IMF Mission for Albania

On 9 March 2021, the Governor of the Bank of Albania, Mr Gent Sejko and other representatives from the Bank of Albania had virtually the concluding meeting with the International Monetary Fund (IMF) Mission team, led by Ms Yan Sun, Mission Chief for Albania, in the framework of the post-program monitoring.

Discussions in the meeting focused on the progress of the Albanian economy, the views on macro-economic perspectives, financial system developments and banking system issues, the impact of the pandemic on economic progress, and the response of regulatory authorities in this regard, as well as expectations for the economic recovery in the future.

Governor Sejko stated that although the Albanian economy was strongly affected by the pandemic in the first half of 2020 and the unfavourable external environment, the economic activity in Albania has shown recovery trends in the second half of year.

The Governor emphasized that the banking system in the country is well-capitalized, solid, liquid and financially sound. He underlined that this sector has helped in mitigating the effects of the pandemic shock, by taking over a part of the financial burden of the shock, as well as simultaneously preserving all the indicators within sound parameters.  

Governor Sejko added that financial markets have continued to operate smoothly: the exchange rate is stable; interest rates remain at their lowest historical levels; and lending has been upward. The non-performing loans ratio, in particular, dropped to 8.1%, at the end of December. This level is close to the historical minimums of the last decade. He emphasized that the continuation of this active role by the banking system during the next period will be crucial for the sustainable economic recovery.

In addition, Mr Sejko stated that in response to the crises created by the pandemic and to alleviate its negative effects, all public actors in the country have taken coordinated economic measures, in fiscal, monetary and macro-prudential terms. The fiscal stimulus transmitted throughout 2020 and the stimulating monetary and fiscal policies implemented by the Bank of Albania have underpinned the economic recovery.

The Bank of Albania undertook immediate measures: lowering the policy rate and ramping up liquidity injections; temporary regulatory facilitation of payment deferrals and loan restructuring; freezing the dividend payments in the banking sector; as well as, forfeiting the fees on interbank transactions fees in the payment systems operated by the Bank of Albania.

The International Monetary Fund representatives assess that the monetary policy stance has been and remains adequate, providing the necessary stimuli to the economic growth. Also, the contribution given by the Albanian authorities in the economy to manage the pandemic shock, especially through the harmonisation of the fiscal and monetary policies, has helped in preserving the macroeconomic stability in Albania and establishing the conditions for the economic recovery restarting.

The Bank of Albania and the representatives of the International Monetary Fund concurred the forecasts in relation to economic outlook and GDP progress, which is expected to gradually recover in 2021 and 2022, where tourism is one of the sectors that is expected to have a considerable contribution in this regard. However, the pace of the recovery depends on the evolution of the pandemic and the speed of vaccination.

In conclusion, the IMF Mission thanked the Governor and the team of the Bank of Albania for the valuable opened discussions.