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Albania leaves the gray list of money laundering, Mete: encouraging and motivating news

2023-10-27 12:02:22Biznes SHKRUAR NGA REDAKSIA VOX
Albania leaves the gray list of money laundering, Mete: encouraging and
Ervin Mete

The senior representatives of the International Monetary Fund held a joint conference with the Bank of Albania as part of the conclusion of the visit to Albania, where the Minister of Economy, Ervin Mete, was also present.

SPEECH OF MINISTER ERVIN METE

Before we move on to the discussions on the latest visit of the International Monetary Fund mission to Albania, I want to start with some good news for Albania.

The decision was made by the FATF, Financial Action Task Force, to remove Albania from the gray list, otherwise known as enhanced monitoring. The decision was taken today by the Plenary Assembly of the FATF and comes as a result of the progress made by our country in implementing the recommendations. This is a decision with a number of positive impacts, both in terms of reputation and in easing the costs of financial transactions in the banking system at home and abroad. It is encouraging and motivating news for us to continue strengthening the fight against money laundering and terrorist financing, as well as to further fulfill the commitments undertaken with international partners.

In this positive spirit, there have been discussions with the IMF mission during the last two weeks, that the International Monetary Fund mission has been present within the framework of Article IV. 

The discussions focused on the progress of the Albanian economy and public finances, challenges for the following period and recommendations for further improvements. It should be noted that for the first time, because no significant risks have been assessed by the IMF mission, the positions expressed in the closing statement will be approved through a consensual procedure, without first going to IMF Board.

The country's economy has shown satisfactory resilience in the face of a series of shocks, having one of the fastest recoveries regionally.

Macroeconomic fundamentals have been stable during this period of challenges, challenges which have served as a test of the economy's resilience and recovery ability. This stability is encouraging for the medium and long-term perspective of the Albanian economy, as well as for the health of public finances in the country.  

During the first half of 2023, economic growth was 3%, with acceleration from the first quarter to the second, where consumption and investment increased by 4.2% and 9.2%, respectively, compared to the first half of 2022.

The sectors that have led the economic growth have been tourism and construction, supported by the increase in domestic demand. In the first half of 2023, employment continued to strengthen, increasing by 2.7% compared to a year earlier. Meanwhile, the unemployment rate followed the downward trend of recent years, dropping to 10.7%, one of the lowest historical figures.  

Preliminary indirect data for the third quarter indicate a faster rate of economic growth. Economic sentiment indicators have reached historically high levels, uncertainties have decreased, and other consumption and investment indicators suggest acceleration of economic growth. 

Based on this good performance, we have revised upward our projections for this year's real growth, to 3.7%, from 2.6% that was the initial forecast.

As for the economic outlook, in our baseline scenario for next year we anticipate an economic growth of 3.8%, while we anticipate an average annual growth of around 4% for the medium-term period ahead. We anticipate that such growth in the medium term will be mainly generated by domestic demand, both from private consumption and from total investment in the economy. Also, we anticipate that net foreign demand will also make a positive contribution, mainly thanks to good expectations for services, especially tourism.

The external balance in terms of the current account has also improved, thanks to tourism and a high level of foreign direct investment (FDI). For the first half of the year, foreign investments reached about 700 million euros or 7.5% more than the same period of 2022. Also, the latest data on the number of foreign visitors for January-September 2023 are very positive, with about 8.3 million foreign visitors, 29% more than the same period of the previous year.   

The financial sector, as the Governor will explain in more detail, remains well-capitalized and liquid to support lending and further economic growth. As for inflation, during this year the monthly inflation has recorded a continuous decline, recently reaching 4.1% in September of this year.

We had a positive income performance, which has brought an upward revision of the income projection at the end of the year, this was also reflected in the Normative Act approved last week in the Council of Ministers. This act aims to support and optimize projects with positive progress, in function of further economic growth.

Today, in a special meeting of the Council of Ministers, we will approve the 2024 draft budget, which continues the support for salary reform, in education, health, law enforcement, defense and other sectors. In addition, next year's draft budget maintains the financing of public investments at the level of over 5% of GDP, provides support for the development of tourism, and continues support for farmers and the needy. 

We remain committed to continuing with fiscal consolidation, with the aim of further reducing the public debt, respecting a positive primary balance, also defined in the law.

We have discussed with the International Monetary Fund on the revision of the Medium-Term Revenue Collection Strategy, for a more coherent strategy that takes into account the latest macro-fiscal developments and indicators and that focuses mainly on good fiscal administration. As for better fiscal administration, there will also be dedicated technical assistance from the IMF. 

The opening of negotiations with the European Union and progress in bilateral meetings is a further impetus for institutional consolidation and advancement of reforms within the EU integration process, and we remain very engaged in this direction.


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