The Minister of Finance and Economy Anila Denaj and the Governor of the Bank of Albania Gent Sejko held an online meetings with Vice President of the World Bank for the Europe and Central Asia Region Anna Bjerde and Director of the Department for Europe at the International Monetary Fund (IMF) Alfred Kammer in the framework of the Annual Meetings of the IMF and the World Bank Group.

Discussions focused on the impact of the pandemic on the performance of the Albanian economy, developments in the financial and banking system and expectations regarding economic indicators in the future.

During the meeting, Minister Denaj and Governor Sejko said that the Albanian economy has been under the strong effect of the Covid-19 pandemic during the first half of the year, especially in the second quarter of 2020 and as a result most economic indicators are expected to be affected by the negative consequences of pandemic this year.

Meanwhile, in the medium term, the duration and impact of the pandemic will be essential in determining the path of recovery of the Albanian economy which is expected to begin recovery in 2021, the Economy Ministry said in a press release on Tuesday, citing Minister Denaj and Governor Sejko.

Furthermore, Minister Denaj assessed that fiscal policy has also played an important role in addressing the situation, financially supporting citizens and providing liquidity support to affected businesses. Also, sovereign guarantee funds for private companies have contributed as a continuous flow of funds, helping in the liquidity situation of businesses and supporting them in difficult moments.

Minister Denaj also stressed that despite the contraction of the economy by 10.2% in the first six months of the year, the government’s forecast for 2020 remain in a decline of only 6.1%, accompanied by an unemployment rate of 12.2%. She also said that the government is committed to return to fiscal consolidation, with a primary positive balance from 2022, safely from 2023, a forecast made in the changes of the organic budget law.

Regarding the banking system, Governor Sejko said that the pandemic found the system with good financial indicators, as well as with a good level of capitalization and liquidity. The banking sector has continued operation without any interruption and has remained ready to make the necessary contribution to cope with the situation created by the Covid-19 pandemic, Sejko said, adding that domestic financial markets are calm and stable interest rates have prevailed. The exchange rate appears to be stabilizing, the Governor noted.

Regarding the easing monetary policy pursued by the Bank of Albania, the Governor assessed that it remains adequate by providing the necessary stimulus to stimulate economic growth and return inflation to target within 2022.

On the other hand, the representatives of the World Bank and the IMF praised the contribution of the Albanian authorities in managing the pandemic in the economy, especially through the harmonization of fiscal and monetary policy, support to citizens and businesses affected by the shocks and maintaining the macroeconomic stability of Albania.