EPA

The International Monetary Fund (IMF) mission chief for Albania Nadeem Ilahi warned on Thursday that the Albanian economy faces tough times ahead in 2013 and advised caution in proceeding with measures to bring down the country’s deficit and public debt.

In his remarks at the high-level regional conference organized by the Bank of Albania and South East European Studies at Oxford University (SEESOX) in Tirana, IMF mission chief Ilahi noted that economic growth in the region and many European countries has declined in the wake of shocks from global markets and from the euro area and that the slowdown may persist and result in declining exports and lower demand.

“Banks should exercise caution in lending business. At a time when Albania’s Central Bank has pursued policies to ensure that banks have adequate monetary reserves to absorb shocks by non-performing loans, Albanian businesses have little access to lines of credit,” the IMF mission chief said.

Albania’s general government’s debt, including state guarantees, increased to 6.3 billion euros in July 2013, data from the finance ministry showed. The debt accounted for 61 percnet of the projected full-year national GDP.

The IMF has repeatedly warned that the Albanian economy faces increasing challenges from its high public debt that is exceeding its statutory limit of 60 percent of GDP.

It’s believed that the relatively high level of indebtedness is putting pressure on the country’s economic growth prospects, while limiting the room for fiscal manoeuvres. neurope