In her address to this conference, Ibrahimaj focused on the role of fiscal policy in terms of the challenge of bringing down the level of inflation and stabilizing the economy in the face of supply shocks, as well as the need of the countries in the region to rebuild fiscal space and strengthen framework of fiscal policies, in order to withstand possible shocks in the future.

“We discussed the impact of subsequent crises that the world has gone through and the effects of crises, how we foresee the world in the future, how important it is to cope with crises while fiscal policies and monetary policies are intertwined and in sync,” she said.
Ibrahimaj announced that they discussed the green transition and the importance of large investments in the field of energy, but also attention to small and medium enterprises, which are at the heart of economic development, but are also at the heart of families and family income both in Albania and in other countries of the world.

The minister emphasized the fact that Albania in the last two decades has managed to pursue a relatively independent fiscal policy, which has been a key factor in coping with several shocks, such as the 2019 earthquake, the Covid 19 pandemic or the effects of the Russia-Ukraine war.

She mentioned several measures undertaken by the Albanian government during the past year, which impacted the level of inflation in Albania, which was significantly lower than in many other countries in the region, one of which was the support of the needy, prioritizing some spending and creating the necessary fiscal space for this.
While emphasizing that fiscal policy can play a decisive role in managing inflation, the Minister said that it is important that it should be implemented in coordination with other macroeconomic policies and be guided by a comprehensive economic strategy.

“Even the case of the COVID-19 pandemic crisis highlighted the importance of fiscal measures to support businesses, maintain employment and stimulate economic activity.

“Viewed in social and political terms, either indirectly by stabilizing the economy or through more directly targeted measures, fiscal policy indirectly benefited vulnerable households by retaining jobs, maintaining income levels and access to essentials and services,” said Ibrahimaj.

However, the Minister said that fiscal policy alone may not be sufficient to address all the challenges posed by supply shocks. In this regard, collaborative efforts with monetary policy, structural reforms and international cooperation are often necessary to achieve a comprehensive and effective response.

The minister said that the countries of the region must rebuild the fiscal space and strengthen the fiscal policy framework to increase their resilience and ability to withstand possible shocks in the future.

Such a thing, according to Ibrahimaj, helps to identify and address weaknesses, reducing risks in the economy; increasing investor confidence and attracting foreign and domestic investments, as well as financial and non-financial investments; ensuring long-term fiscal sustainability.

“Sound fiscal policies, including sustainable debt management, revenue diversification and expenditure rationalization, are essential to maintain macroeconomic stability and prevent fiscal imbalances. This, in turn, strengthens resilience to future shocks and provides a solid foundation for sustainable economic growth.”

The countries in the CESE region, said Ibrahimaj, should prioritize the reconstruction of the fiscal space and the strengthening of the fiscal policy framework to increase their resilience and ability to withstand future shocks.

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