PRESS RELEASE
IMF Staff Concludes a Remote Staff Visit to Albania, July 2020

An IFM mission led by, Yan Sun, head of the IMF mission in Albania conducted remotely a staff visit to Albania during 25 June- 1 July 2020. During this mission, meetings were held on-line with the Governor Gent Sejko and other representatives of the Bank of Albania on relevant issues.

Discussions focused on Albania's macroeconomic developments and their expectations for the period 2020-2021, the impact of pandemics and economic recovery. During the concluding meeting of this mission, Governor Sejko stressed that the Albanian economy was under the strong impact of the pandemics during the second quarter, which negatively impacted consumption, investment and exports of goods and services, but the domestic banking sector remains sound and financial markets appear relatively calm.

In response to this crisis, the Bank of Albania, since the beginning of the pandemic, has taken a full package of measures to provide the necessary liquidity for the banking system, to reduce financing costs and to help Albanian businesses and households. The fast and coordinated response of the macroeconomic policies undertaken, helps to improve the economic perspective of Albania and create the premises for a rapid recovery of the economy in the up-coming period.

The International Monetary Fund stated that the near-term outlook for the Albanian economy remains challenging, reflecting the significant impacts from the November 2019 earthquake and the COVID-19 pandemic. The mission highlighted that as a consequence of Albania’s dependence on tourism and remittances, the economy is expected to contract sharply in 2020 and see a rebound in 2021.

During the official statement, the mission noted the support given to citizens and businesses affected by the shocks. Moreover, the mission commended the Albania’s macroeconomic stability thanks to the skilful policy management and globally accommodative financial conditions. 

The mission also stated that the Bank of Albania’s accommodative monetary policy remains appropriate. In the statement it was highlighted that the banking system overall entered the pandemic liquid and well-capitalized. However, its resilience will be tested for pockets of vulnerabilities, e.g. still high stock of NPLs. The mission stated that continued flexibility in the exchange rate will help absorb the shocks and restore external balance. The mission supported the initiative of the banking sector for prudent bank loan restructuring to sectors and firms heavily affected by the shocks.

Concluding, the IMF mission thanked the Albanian counterparts for the open and fruitful discussions and wished the government and people of Albania success in overcoming the shocks.