The International Monetary Fund (IMF) told Albania on Tuesday it should strengthen economic fundamentals since its economy could not be completely immune to the global crisis that was slowing growth worldwide.
Gerwin Bell, the IMF mission chief, said the Balkan state’s limited integration in global markets was an important buffer but its exports were expected to fall, remittance payments could be affected and investors might re-assess risks.
“With a sharp deterioration of global growth prospects now under way, it is important that Albanian policy makers further strengthen economic fundamentals,” Bell told a joint news conference with Albanian Finance Minister Ridvan Bode.
“Obviously, the government cannot influence exogenous global events, but it can and should take extra steps to shore up confidence domestically as, in the current environment, policies should be erring on the side of caution,” Bell said.
“This would allow Albania to weather these turbulent times and still record significant growth of between 3.5 and 4 percent in 2009, with continued low inflation and an improved current account position,” he added.
Bell said the Albanian economy in 2008 had so far performed strongly and October’s annual CPI was fixed at 2.8 percent — in line with the central bank’s target range — while growth has remained buoyant and on track to reach 6 percent in 2008.
“However, growth in tax revenue has now slowed,” he added.
The IMF has monitored the Albanian economy since 1991, when the once isolated Stalinist Balkan nation toppled communism. The fund’s ongoing three-year programmes — worth together $27.9 million — expire in January 2009.
Once the current agreement expires in January, Bode said he expected the IMF to return to Albania after the 2009 spring elections to discuss a new agreement that had “less objectives”.
The IMF’s call for prudent policies in the current global turbulence have not dented the enthusiasm of the Albanian government that sees growth at six percent as its passes the biggest ever budget of five billion dollars.
“We are proud to keep preserving despite the turmoil and turbulence of the banking and financial system in the world a very high economic growth,” Bode said.
“The economic growth of 6 percent planned in the 2009 budget is again a powerful backing for the real economy to give hope and possibility to the Albanian economy,” Bode added. (Reporting by Benet Koleka, editing by Ron Askew)
source : guardian.co.uk