Albanian economy to grow by 3.4 pct in 2016

The Albanian economy is expected to grow by 3.4 percent by the end of 2016 and inflation will stay at around 1.8 percent, Anita Tuladhar, the chief of mission of the International Monetary Fund (IMF) to Albania, said on Tuesday.

Tuladhar made the declaration during a joint press conference with Albanian Finance Minister Arben Ahmetaj and Central Bank of Albania governor Gent Sejko.

"The banking sector remains liquid and well-capitalized. However, the lending levels remain below the standards, while the tax and customs revenues are generally in line with the state budget forecasts, confirming the Albanian government's efforts and reforms drive," underlined Tuladhar.

According to the IMF representative, the Albanian government should avoid a recurrence of the arrears accumulated in the form of unpaid public work bills.

The IMF will allocate the next 36-million-euro (40 million U.S. dollar) tranche to Albania by the end of August.

Meanwhile, Ahmetaj declared that the Albanian economy reflected stability and the government was sticking to its 3.4 percent growth forecast for 2016.

According to Ahmetaj, the government was committed to cutting public debt and helping the business environment by simplifying tax and customs procedures, while maintaining steady revenue performance.

Ahmetaj explained that the fiscal framework was being discussed with the IMF and would receive the government's approval in July.

For his part, Sejko said the Bank of Albania had been engaged in intensive discussions with IMF Mission representatives on the current situation of the Albanian economy and financial system; identification of development prospects and challenges facing the country; and the policies to be implemented with a view to supporting the country's development.

According to Sejko, economic activity appeared to be headed upward and the development outlook remained positive, whereas the return of inflation to target would be a gradual and medium-term phenomenon.

"The Bank of Albania deems that the financial setting -- characterized by low interest rates and ample liquidity -- should encourage banks for a more positive approach towards lending," said Sejko.