PRESS RELEASE
Governor Sejko attends in virtual the 2021 Annual Meetings of the International Monetary Fund and the World Bank Group

On 13-20 October 2021, the Governor of the Bank of Albania, Mr Gent Sejko, in the capacity of the Governor of the Republic of Albania at the IMF, attended the Annual Meetings of the International Monetary Fund (IMF) and the World Bank Group (WB), which due to the pandemic took place in virtual.

At the conclusion of these meetings, the International Monetary and Financial Committee issued a Communiqué pointing out that: The global economic recovery continues.  But divergences between economies persist, reflecting stark differences in vaccine access and policy support. The emergence of virus variants has increased uncertainty, and risks to the recovery are tilted to the downside. Strong international cooperation and immediate action are needed to expedite universal vaccination to stem the spread of the pandemic, limit divergences, and support an inclusive recovery everywhere.

Against a complex environment, we will carefully calibrate our domestic policies to the evolving pandemic and available policy space.  We will continue to prioritize health spending and protecting the most vulnerable, while shifting focus, as appropriate, from crisis response to promoting growth and preserving long-term fiscal sustainability, including, where applicable, by bolstering medium-term fiscal frameworks. Central banks are monitoring price dynamics closely and can look through inflation pressures that are transitory. They will act appropriately if risks of inflation expectations de-anchoring become concrete.  Clear communication of policy stances can help limit negative cross-country spillovers. We will continue to monitor and, as necessary, tackle financial vulnerabilities and risks to financial stability, including through targeted macroprudential policies.  We are also taking comprehensive action to extend financial assistance to countries in need, while supporting countries’ efforts to restore debt sustainability and strengthening debt transparency practices by both debtors and creditors, public and private.”

A joint delegation of the Bank of Albania and the Ministry of Finance and Economy represented Albania in the Annual Meetings of the IMF and the WBG. The Bank of Albania was represented by the Governor, Mr Gent Sejko, the First Deputy Governor, Ms Luljeta Minxhozi, the Second Deputy Governor, Ms Natasha Ahmetaj, and other BoA senior officials. The Ministry of Finance and Economy was represented by the Minister of Finance and Economy, Ms Delina Ibrahimaj, Deputy Minister, Ms Adela Xhemali, Deputy Minister, Ms Vasilika Vjero and other executives of this institution.

During the IMF-WBG Annual Meetings 2021, Governor Sejko had several important meetings with prominent personalities of international finance. Amongst others, from the IMF: Mr Alfred Kammer, Director of the European Department at the International Monetary Fund; Mr Domenico Fanizza, Executive Director for Albania; Ms Yan Sun, Mission Chief for Albania, International Monetary Fund; Mr Udaibir Das, Assistant Director and Advisor Monetary and Capital Markets Department, IMF; and from the WBG: Ms Anna Bjerde, the World Bank Vice President for Europe and Central Asia, and with Mr Matteo Bugamelli, the World Bank Group Executive Director for Albania. In the framework of these meetings, Governor Sejko also participated in the plenary session of the IMF's International Monetary and Financial Committee and in the meeting of Ministers of Finance and Governors of the Central Banks of the Central, Eastern and South-eastern European (CESEE) countries.

During the meetings, Governor Sejko presented an overview of the economic and financial situation in Albania, highlighting that the Albanian economy is on track to gradually rebound and will accelerate in the rest of 2021 and during 2022. Currently, the economic growth has returned to its pre-pandemic and pre-earthquake levels.  Nevertheless, Mr Sejko stated that the projection on the economic recovery depends on many factors, as: the course of the pandemic; the sustainability of the global economic recovery; and the impact of current supply-side shocks. 

The increase of prices in global markets will affect the performance of inflation in Albania, and it is assessed as a risk-related factor to inflation rate and potentially - to the speed of economic recovery. Nevertheless, this effect is expected to be transitory. The Bank of Albania will monitor the consequences caused by the increase of prices in global markets, and in any event its impact on inflation would prove to be higher than the expectations, the Bank of Albania remains ready to review the monetary policy stance, taking care the latter be always in line with our inflation target.

The Governor pointed out that the Bank of Albania, throughout this period, has maintained an accommodative monetary policy stance for the stable convergence of inflation to target, and for supporting the economic growth.

Another issue discussed in these meetings was the consolidation of the banking sector. In this regard, Mr Sejko stated that the Bank of Albania remains focused on prudential supervision of banking system in Albania. The Bank of Albania assesses that the financial system and baking sector have continued to perform steadily, notwithstanding the risk to the activity.  

In particular, the banking sector has significantly expanded its activity and the main indicators of financial stability are at adequate levels. Both deposits and loans increased, credit quality improved considerably, while the non-performing loans ratio reached at the lowest level in the last 15 years, 6.9% at the end of August 2021.  Overall, the exposure of the banking sector to risks appears contained.

Next, Governor Sejko said that the focus of mocroprudential policies of the Bank of Albania will shift on the further development of financial system. The Bank of Albania pays a considerable attention to the improvement of the regulatory architecture of this system. The strengthening of financial safety networks is a continuous work.

In addition, the Bank of Albania will support the development of the financial market with the necessary instruments, and will encourage the Government to undertake concrete actions to supporting the de-euroisation of the economy of Albania. 

Also, the Bank of Albania expects a return to the consolidating side of the fiscal policy orientation, which would serve to the increase of spaces for reaction against potential shocks in the future and to the right mix of policies normalisation.

Representatives of the IMF and WBG assessed positively the policy implemented by the Bank of Albania, thus contributing to the mitigation of the negative effects caused by the pandemic and to the establishment of the premises for a faster recovery of the economy.

They emphasised that the Bank of Albania has implemented a monetary policy, being qualified as “the right one”, which has provided a favourable financial environment for the economic growth and the return of inflation to target. They highlighted that this policy has enabled: the smooth functioning of the financial markets; low financing costs of public and private sectors; and sound balance sheets of banking sector.

The IMF and WBG officials stated that the Bank of Albania, along with the measures undertaken throughout the pandemic, may be considered a quite good model amid central banks for the management of risks arisen form the pandemic.

Governor Sejko thanked the representatives of the IMF and WBG for the support and assistance provided continuously to the Bank of Albania in the fields of financial education, statistics, resolution, financial operations and stated his optimism to extend in the future this collaboration in the field of financial supervision as well.