The International Monetary Fund (IMF) said it has completed the fifth and sixth review of Albania's economic performance, allowing the country to draw a further loan of 80.6 million U.S. dollars, the Albanian Daily News newspaper reported Friday.
"Albania's economic recovery is on track but downside risks persist," Min Zhu, deputy managing director and acting chair of the IMF executive board, said in a statement. "The authorities should persevere with their reform program and build on the substantial progress to date to boost the country's growth potential while maintaining macroeconomic stability," he said.
The fund noted that the Albanian government's fiscal consolidation efforts, based on broadening the tax base and improving tax compliance and administration, are appropriate. It advised the government not to rely on one-off measures but to avoid granting any further tax exemptions or preferential tax rates, as well as to strengthen the capacity to execute public investment projects.
The IMF considers Albania's current accommodative monetary policy position as appropriate to cope with deflationary pressures, adding that it should be pursued gradually to avoid risks to financial stability. "Strengthening the central bank's credibility and safeguarding its independence remain critical for fulfilling its mandate," Zhu said. He underlined that the tackling of the large stock of non-performing loans is essential for reviving the flow of credit.
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