SECTOR BUDGET SUPPORT READINESS. Macroeconomic Stability As noted in the 2015 report published in November 2015, Albania preserved macroeconomic stability and is moderately prepared in developing a functioning market economy. Some progress was made in improving macroeconomic stability, growth prospects improved and a public finance management reform is in place. However, significant challenges remain. Albania should in particular pursue fiscal consolidation, improve the budget management framework, tackle the high-level of non-performing loans and improve the business environment by strengthening the rule of law. The level of unemployment and informal employment remains high. In line with the Economic Reform Program (ERP) recommendations and in order to support long-term growth, in the coming year Albania should pay particular attention to: i) sustaining fiscal consolidation and strengthening the budget management framework; ii)tackling the high level of non-performing loans; iii)improving the business environment by implementing regulatory reforms and adopting the new bankruptcy law. According to the ECFIN Subcommittee conclusions in December 2015 the Albanian authorities pursue credible and relevant stability oriented macroeconomic policies aiming at supporting economic recovery and restoring fiscal stability and sustainability. Revenue underperformance and high level of public debt remains key source of macroeconomic risks, but the authorities remain committed to addressing it. The government also launched a fight against informality. At the same time, fiscal consolidation should preserve space for growth-enhancing public investment by enhancing revenue collection. The implementation of three-year financing arrangement with the International Monetary 6 See xxxx://xxx.xxxxxxxx.xxx/library/multi-annual-plans/ Fund agreed in February 2014 supports strengthened macroeconomic stability and growth-boosting reforms are on track. The IMF Reached Staff-Level Agreement for Completion of Fifth and Sixth Reviews of the program in November 2015 and the Executive Board approved for the authorities to draw an additional amount equivalent to about €72.4 million, bringing total disbursements to about €226.8 million. The European Commission assessment of Albania’s ERP 2017-2019 of May 2016 confirms that the macroeconomic framework presented is coherent, consistent and sufficiently comprehensive and provides an adequate basis for policy evaluation and discussions. In 2015 revenue significantly underperfo...
SECTOR BUDGET SUPPORT READINESS
