The meeting focused on the IMF’s upcoming assessment of public investment efficiency in the country, detailed in a report the Fund will publish soon.

During the meeting, there were highlighted the progress and significant improvements Albania has achieved in recent years regarding the planning and management of public investments.

Albania’s public investments have sustained a robust 6.5% of GDP, a trend projected to continue as the nation advances its European Union accession. Future allocations will target critical sectors, including transport, energy, digitalization, and climate resilience. Furthermore, Finance Minister Malaj highlighted that an IMF assessment ranks Albania on par with EU member states and advanced global economies in public investment planning and management.

This improvement is reflected in key elements of public finance management, including budgetary discipline, fund allocation methods and increased transparency and competitiveness in public procurement.

“Public funds are being invested more effectively today,” Malaj noted, stressing that this is not merely an assessment by Albanian institutions, but progress also recognized by international bodies such as the International Monetary Fund.

This progress is particularly significant as it directly relates to how state budget funds are utilized for investments in sectors vital to citizens, such as infrastructure, healthcare and education.

Minister Malaj highlighted the importance of the transparent and competitive use of public funds—especially for investments in roads, hospitals or schools—emphasizing that simply allocating funds in the budget is not enough. It is important that these funds be utilized as efficiently as possible and that every lek spent yields the greatest possible added value for citizens.

The IMF’s assessment serves as a positive indicator of the progress achieved in this regard; however, as Minister Malaj emphasized, while this is good news, the work is far from over. The objective remains to continue reforms and further strengthen the mechanisms that ensure the most efficient planning and management of public investments.

In this context, the Ministry of Finance will continue its efforts to ensure that every lek of Albanian citizens’ money and every public investment generates greater development, higher-quality services and increased value for Albania. /p.s./

Speaking in response to criticism from opposition Democratic Party lawmaker Enno Bozdo, Ibrahimaj said economic indicators showed an improvement in living standards and economic conditions compared with previous years, while acknowledging that further progress was needed.

Bozdo argued that Albania’s annual per capita income remained around 10,000 euros and raised concerns about structural reforms, pensions and the coverage of social assistance programmes.

Ibrahimaj said comparisons with European Union averages showed that Albania still had ground to cover, but added that the country’s economic trajectory should also be assessed in terms of progress over time.

She pointed to Albania’s gradual convergence with European economies and highlighted the European Union’s Growth Plan for candidate countries, under which funding is linked to the implementation of reform measures.

Addressing pensions, Ibrahimaj rejected suggestions that annual indexation was not being applied, saying pension adjustments are based on inflation calculations prepared by the national statistics office, INSTAT, and implemented by the Social Insurance Institute.

The Minister said the government wanted to increase wages and pensions further but stressed that such increases should be supported by productivity growth rather than higher public borrowing.

Ibrahimaj also said official data and international assessments pointed to declining poverty levels, an increase in contributors to the pension system and an improvement in economic conditions compared with 2013.

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During their stay in Tirana from May 28 to June 2, IMF representatives held meetings with leaders and experts of the Bank of Albania, as well as a closing meeting with Governor Gent Sejko.

The discussions focused on current macroeconomic developments, monetary policy, financial stability, and the prospects of the Albanian economy.

In his presentation, Governor Sejko emphasized that the Albanian economy has maintained positive performance despite external challenges, generating employment and wage growth.

He underlined that the main economic and financial indicators have improved, including inflation, public and external debt, the level of non-performing loans and banking sector indicators.

On their part, the IMF representatives assessed that the Albanian economy continues to remain resilient to external shocks, while the economic outlook appears generally favorable.

However, they warned about the need of continuous monitoring of uncertainties related to international developments and geopolitical tensions.

Regarding inflation, the mission highlighted the impact of rising energy prices and the significance of monitoring inflationary expectations.

In this context, the IMF positively assessed the analyses and forecasts of the Bank of Albania, considering the monetary policy pursued as appropriate and oriented towards maintaining price stability.

Exchange rates and foreign exchange reserves were another key topic. IMF representatives examined the central bank’s operations and agreed that the stronger lek reflects positive, structural changes in the economy. They highlighted that maintaining a free-floating exchange rate is a key tool for keeping Albania’s economy stable and adaptable.

The meetings also addressed long-term structural constraints on the Albanian economy, notably demographic shifts, sluggish productivity, and the transformative impact of European integration.

During the meetings, the long-term challenges of the Albanian economy were also discussed, including demographic developments, productivity growth and the impact of the European integration process on the country’s economic prospects. /j.p/p.s./

During the meeting, Yzeiraj updated the IMF mission on government actions to improve credit access for underserved sectors.

Key focus areas include implementing sovereign guarantees via the ‘Double Your Entrepreneurship’ package and progress on the Development Bank’s establishment.

According to him, another key focus was boosting economic funding without compromising lending standards.

In this context, the parties exchanged experiences and successful practices from other countries that have followed similar development models.

Yzeiraj stressed that financial stability remains a key element for ensuring sustainable economic growth in the long term, as well as for advancing the country’s European integration process. /j.p/p.s./

Governor Sejko delivered a speech to the meeting, sharing some reflections on the current challenges in an environment of high geopolitical uncertainty and increased inflationary pressures.

In his remarks, he focused on three main points:

“First, Albania is in a stronger position thanks to the improvement of macroeconomic sustainability, financial stability and structural reforms undertaken over the last decade,” said Sejko.

“Second, despite this progress, we must remain vigilant and act swiftly to safeguard price stability,” he noted.

“Thirdly, strengthening international policy coordination and institutional dialogue is crucial for success in an increasingly interconnected global economy,” Sejko said, according to a statement from the Bank of Albania.

The Governor also underlined that macroeconomic stability is a long-term investment that requires sustainability and continuous commitment.

The meeting took place in the framework of the 2026 Spring Meetings of the IMF and the World Bank in Washington, DC. /m.q/j.p/p.s./

Sejko and Malaj presented an analysis of current economic and financial conditions, along with projections for future developments.

The Albanian economy shows sustained growth, driven by a tight labor market, low inflation and a sound financial sector.

However, they highlighted that global volatility—particularly Middle East developments—demands heightened scrutiny in risk assessments.

Discussions highlighted that prudent macroeconomic policies have maintained price stability, strengthened financial sustainability and reduced public debt.

The central bank reiterated its commitment to keeping inflation low and stable, acting on new economic developments and assessing international risks. /j.p/p.s./

Governor Gent Sejko is heading a Bank of Albania delegation, accompanied by First Deputy Governor Holta Zaçaj and senior management.

During the visit, Governor Sejko will meet with IMF, World Bank, and central bank officials to present on Albania’s economic performance, ongoing reforms, and outlook for monetary and financial stability.

Participation in this forum highlights the Bank of Albania’s unwavering commitment to sustainable economic policies and closer cooperation with international financial institutions, driving the country’s development forward. /e.xh/j.p/p.s./

Speaking at a news conference on 2025 economic indicators and the outlook for next year, Ibrahimaj referred to a recent International Monetary Fund (IMF) report, saying the government had reviewed it carefully but maintains a positive assessment of the fiscal peace initiative.

In its statement following the 2025 Article IV consultation, the IMF said the agreement – which includes debt forgiveness and preferential revaluation of financial statements – could weaken tax administration and compliance.

Ibrahimaj said participation in the scheme is voluntary and designed to provide predictability for both businesses and the state budget.

“It is important that businesses know what they will pay, just as the state must know what revenues it will collect,” she said.

The package includes forward-looking voluntary agreements with tax authorities and measures to address past liabilities, allowing companies to move forward without inherited financial burdens, she added.

Ibrahimaj rejected concerns over fiscal risks, saying projections point to continued economic growth and revenue performance next year, and noted that Albania’s Medium-Term Revenue Strategy is aligned with European Union tax policies.

“Our path is toward alignment with EU standards, and nothing in this package threatens fiscal sustainability,” she said.

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According to the IMF Executive Board’s assessment, Albania’s economic growth is projected to remain robust at 3.5 percent in 2025 and 3.6 percent in 2026, driven mainly by private consumption and continued support from the tourism sector. The IMF noted that Albania’s economy has already surpassed its pre-pandemic level, reflecting an appropriate mix of fiscal and monetary policies.

Inflation is projected to rise gradually from 2.2% in 2025 toward the 3% target in the second half of 2026, amid a tight labour market and rising wages.

The current account deficit is forecast at 2.8% of gross domestic product (GDP) in 2025 and is expected to widen gradually to around 3.5% of GDP over the medium term, as imports increase in response to higher incomes and public capital investment.

The IMF said fiscal discipline has led to a significant reduction in public debt, which is projected to fall below 50% of GDP, while strong foreign exchange reserves have markedly strengthened the country’s external position. In this context, the Albanian government is advancing ambitious reforms aimed at securing European Union membership by 2030.

However, the IMF warned that risks to the economic outlook have shifted to the downside due to a more volatile external environment. Geopolitical tensions, escalating trade measures, commodity price volatility and instability in global financial markets could negatively affect Albania’s main trading partners and external demand. Domestically, a shrinking working-age population could deepen labour shortages and add inflationary pressures.

To preserve macroeconomic stability and close reform gaps with the European Union, the IMF said timely domestic reforms are essential.

Maintaining fiscal buffers remains a priority, through sustained revenue mobilisation, improved tax administration, modernisation of the property tax system, and greater transparency and quality in public spending.

On fiscal policy, the IMF said rising expenditure pressures, if not addressed in a timely manner, could undermine fiscal sustainability, particularly beyond 2030, due to demographic changes, defence-related obligations and climate-related spending. To safeguard fiscal buffers, it recommended growth-friendly revenue measures, improvements in spending quality and enhanced fiscal transparency.

In this context, the IMF also commented on the government’s “Fiscal Peace” initiative.

“The ‘Fiscal Peace’ agreement, which offers debt forgiveness and preferential revaluation of financial statements, risks undermining past progress in tax administration and compliance,” the IMF Executive Board said in its statement.

On monetary policy, the IMF said the current stance of the Bank of Albania is appropriate, but stressed that the central bank should remain ready to respond swiftly to market developments, particularly if second-round effects from wage growth prove stronger than expected. It also recommended greater exchange rate flexibility and increased reliance on interest rates to maintain price stability.

Regarding the financial sector, the IMF underscored the need for close monitoring of risks related to real estate lending, foreign currency exposures and sovereign debt, as well as strengthening the prudential framework and banking supervision.

Over the medium term, the IMF said achieving income convergence with the European Union will require deep structural reforms, particularly in boosting productivity, developing human capital, improving labour market functioning, strengthening governance and combating corruption.

The next Article IV consultation is expected to take place on the standard 12-month cycle.

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Speaking at a regular session of Parliament on 2026 state budget bill and fiscal package, Rama emphasized that Albania’s progress in reducing poverty and increasing household income is reflected in independent international assessments, arguing this is a key reason the government is serving a fourth term.

The government head cited Eurostat data indicating that “Albania has a lower risk of poverty than Serbia, Bulgaria and Turkey and is closer to the EU average.”

He said the share of food expenses in household budgets has dropped from nearly 50% when the Socialists took office to below 40% today. According to the Bank of Albania, he added, real disposable household income has risen by 4-5% annually between 2021 and 2024.

Rama also referenced a recent IMF assessment stating that “Albania is among the fastest-growing economies in Europe, with prudent fiscal and monetary policies.”

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