Governor Sejko: Virtual meeting with the International Monetary Fund Mission

On 11 June 2021, the Governor of the Bank of Albania, Mr Gent Sejko, and other representatives of the Bank of Albania had a virtual meeting with the International Monetary Fund (IMF) Mission team, led by Ms Yan Sun, Mission Chief for Albania, in the framework of the IMF concluding staff visit conducted remotely with Albania.

The issues discussed during this meeting were: the performance of the Albanian economy; developments in the financial system; impact of the pandemic on the economic growth; and expectations about the economic recovery in the next period.

Governor Sejko stated that despite the Albanian economy still continues to suffer the consequences of the COVID-19 pandemic, and its impact on consumption, investments and public debt, the main economic indicators have already turned improving.

Mr Sejko explained that the monetary conditions continue to remain accommodative in financial markets. They operate smoothly; the exchange rate appears stable; while banking sector has continued to lending households and enterprises.  These developments reflect both the soundness of the banking sector’s balance sheets and its right reaction to this shock. In April 2021, the non-performing loans ratio dropped below 7.8%, by recording the lowest rate since 2009.

In response to this crisis, Governor Sejko highlighted that the Bank of Albania, through the reduction of policy rate, provided the necessary monetary stimulus to guarantee the normal functioning of financial markets and to further stimulate lending to the economy. Also, the Bank of Albania offered additional facilities for Albanian enterprises and households, through the temporary and targeted easing of the supervisory framework on the banking sector activity, the six-month moratorium on credit repayment; and by urging loan restructuring.

The International Monetary Fund assesses that the Bank of Albania’s accommodative monetary policy remains appropriate, for boosting consumption and investments, which in turn will further contribute to the increase of employment and wages, in line with the inflation target determined by the bank.

Then, the Governor and the IMF representatives discussed on the priorities of the economic policies. The interlocutors concurred that monetary and fiscal policies should continue to remain simulating throughout this year, with a view to providing the required support to the economic growth.  Fostering the sustainable economic rebound should be accompanied by a higher attention towards the economic and financial stability of Albania, by simultaneously expanding the reaction spaces of policies in face of possible challenges in the future. 

In a long-term horizon, the IMF representatives emphasized the need to accelerate the agenda of structural reforms. These reforms should aim at: increasing competition; further improving the investment climate and business environment; and long-term fostering of public finances, as instruments which will enable a more stable and faster growth of the Albanian economy 

At the end of the meeting, the IMF Mission thanked Governor Sejko and the BoA's staff for the open and fruitful discussions.