IMF Seeks Merging of Transparency Board on Price Regulation
International Monetary Fund (IMF) has asked the government to support families in need, which since the beginning of this year are facing the rising tide of prices.
According to the IMF, this should not be done through the Transparency Board that has been set up to fix prices, suggesting the merging of this structure.
"Given the challenges of the transparency board that monitors the prices of some basic food items, we see fit to replace it with well-oriented support for the poor and the exposed strata in order to protect them from the effects of rising prices. For this reason, efforts to improve the social protection system in the country must continue, including expanding coverage of the poor and needy in the informal sector", it is said in the declaration.
At the end of the visit to Albania, the IMF mission has also proposed a gradual review of electricity tariffs, through a scheme that protects the poor.
"The turmoil in global energy markets has further aggravated the fiscal burden coming from the electricity sector and underscores the urgent need for crucial reforms to restore the financial viability of state-owned enterprises. In addition, gradual changes in tariffs are needed, which should be accompanied by measures that protect the poor and needy.
For 2022, based on current indicators, economic growth is projected to be around 3 percent, supported by tourism and construction.
Inflation, the IMF notes, has risen sharply above the central bank's 3% target and is expected to remain high in the coming months driven by import prices before returning to the target again in early 2024.
"We support the decision of the Bank of Albania to continue with the normalization of monetary policy and we note that it remains accommodative, despite the increase in the key interest rate in March. In order to curb domestic inflationary pressures and turn inflation expectations back on target, further increases in the key interest rate are needed", the IMF statement also said.
Meanwhile, according to Governor Sejko, Albania is facing a serious blow coming from rising prices and the expected tightening of financial conditions, however the economy is expected to grow in 2022 and beyond, proving the breadth and solidity of sources of growth, the sustainability and support of the financial sector, as well as the flexibility of the private sector.
At the joint meeting held yesterday, the Governor stressed that the monetary policy of the Bank of Albania is expected to start a gradual course of normalization, aiming to control medium-term inflationary pressures and return inflation to the target as soon as possible and at the lowest possible cost.