IMF: Failure in EU talks would cost Albania 1% of GDP per year; public debt would soar at 74.3%

Almost the entire first IMF post-monitoring report is based on a hypothesis, that of sped up reforms, as a result of opening accession negotiations with the European Union.

The IMF goes even further, saying that this something highly likely to happen.

All projections, including those of 4% growth over the medium term, until 2023, are based on this expectation.

So, if negotiations are to be opened, then the Albanian government will accelerate the reform process, following the various chapters of the membership.

This would bring improved business climate, and consequently more investment.

But there is another scenario: postponement and delay in reforms.

This would happen mainly if there is a postponement of negotiations, or at worst, failure.

IMF best analyzes this scenario, also providing tangible projections.

Based on this last scenario, Albania’s economic growth would drop to 3% over the next few years, which means that the lack of negotiations for joining the union could cost the Albanian economy up to 1% of Gross Domestic Product per year.

But it does not end here.

In the normal scenario, that of continuing reforms, the public debt is projected to drop to 60.4%, and if reforms are to be delayed, the projections point to the public debt ratio in relation to GDP at 74.3% in 2023.

If we move according to the IMF’s reasoning, opening negotiations is not just a political process and as just a matter of access to European Union funds but a direct link to the key macroeconomic parameters of the country.

SCAN

*Material i përgatitur nga portali SCAN. Ripublikimi mund të bëhet vetëm kundrejt citimit të autorësisë dhe burimit origjinal.