TY - BOOK ID - 84656095 TI - Albania : First Review Under the Extended Arrangement and Request for Modification of Performance Criteria. PY - 2014 SN - 1498319203 1498343597 1498337309 PB - Washington, D.C. : International Monetary Fund, DB - UniCat KW - Fiscal policy KW - Monetary policy KW - Monetary management KW - Economic policy KW - Currency boards KW - Money supply KW - Tax policy KW - Taxation KW - Finance, Public KW - Government policy KW - Albania KW - Economic conditions. KW - Banks and Banking KW - Exports and Imports KW - Public Finance KW - Industries: Financial Services KW - International Lending and Debt Problems KW - Debt KW - Debt Management KW - Sovereign Debt KW - Banks KW - Depository Institutions KW - Micro Finance Institutions KW - Mortgages KW - Taxation, Subsidies, and Revenue: General KW - Trade: General KW - International economics KW - Public finance & taxation KW - Banking KW - Finance KW - Arrears KW - Public debt KW - Revenue administration KW - External debt KW - Nonperforming loans KW - Financial institutions KW - Debts, External KW - Debts, Public KW - Banks and banking KW - Revenue KW - Exports KW - Loans UR - https://www.unicat.be/uniCat?func=search&query=sysid:84656095 AB - KEY ISSUES Background: On February 28, the Executive Board approved a three-year Extended Arrangement with access of SDR 295.42 million (492.4 percent of quota). A purchase of SDR 23.55 million (about EUR 26.4 million) was made in April 2014, and another will be made in the same amount upon completion of the first review. Recent Economic Developments: Growth in 2013 was the lowest in more than 15 years. The economy is showing tentative signs of recovery, but remains below potential. Successive monetary easing has not prevented credit contraction. The banking system remains stable, but asset quality is a concern. Program Performance and Risks: The program is on track. All end-March quantitative performance criteria and structural benchmarks were met, except for the structural benchmark on contracting an external auditor to conduct risk-based audits of arrears payments, which was not met but the government expects to complete in the coming weeks. An indicative target on accumulation of new arrears was not met although by a small margin and inflation has been slightly below the inner band prescribed under the inflation consultation clause. Program risks emanate from the complexity of reforms, particularly in electricity sector, and the need for sustained political commitment over the medium term. Policy Recommendations: No new fiscal measures will be needed in 2014, but the authorities should tackle emerging fiscal risks. Arrears clearance can be accelerated once external audits have progressed sufficiently. Addressing high NPLs will require continued efforts to clean bank and private sector balance sheets. Preparatory work related to the 2015 budget and structural reforms should start soon. ER -