Printer Friendly

INTERNATIONAL MONETARY FUND APPROVES LOAN FOR ALBANIA

 WASHINGTON, July 14 /PRNewswire/ -- The International Monetary Fund (IMF) has approved a three-year loan for Albania equivalent to Special Drawing Rights (SDR) 42.36 million (about US$59 million) under the enhanced structural adjustment facility (ESAF)(A) to support its economic and financial program for 1993-96. Albania may draw up to SDR 16.94 million (about US$23 million) to support the first annual program. The ESAF follows an IMF stand-by credit equivalent to SDR 20.0 million (about US$28 million) in support of the country's 1992-93 economic program, which was due to expire in August, 1993.
 Albania's recent emergence from communist rule was accompanied by a severe economic crisis. The new government that assumed office in April 1992 acted quickly and decisively to address the crisis, and in August of the same year sought an IMF stand-by credit to support its economic program. After one year, the economy's downward spiral has been arrested, the slide into hyperinflation has been reversed, and the major initial structural reforms have been implemented and absorbed. Albania's external position has also improved somewhat, reflecting the strong domestic policy effort as well as large external support of the program.
 Albania's 1993-96 economic reform program aims at a sustained revival of growth and further progress toward external viability. Key elements of the reform strategy are the progressive reduction of public finance imbalances, establishment of institutions critical to a market economy, state enterprise reform and implementation of a well-targeted social safety net. Substantial foreign assistance will be necessary to support this program, including to resolve Albania's large external arrears.
 The 1993-94 economic program aims at continuing the adjustment process started under the program supported by the IMF stand-by credit while initiating a second stage of major structural reforms. The principal macroeconomic objectives are real GDP growth of 3-4 percent during 1993 and 1994, a reduction of the 12-month inflation rate to 40 percent by the end of 1993 and to 33 percent by mid-1994, and a further strengthening of the external position, including a buildup of official reserves to three months of imports by mid-1994.
 To achieve these objectives, fiscal policy under the program will contain the bank-financed budget deficit to the equivalent of 11.3 percent of GDP in 1993 and to 7 percent of GDP in 1994. Income policies and monetary policies are designed as the twin nominal anchors of the program and are consistent with its growth, inflation and external objectives. Interest rates are to be kept at positive levels in real terms. In the external field, the program will seek to reduce significantly Albania's dependence on emergency assistance and strengthen reserves; complete the liberalization and improve the efficiency of the exchange and trade system; and normalize relations with external creditors.
 Further price reform is a key element of the program, starting with a major up-front adjustment in prices of wheat, flour, bread and other items. Part of the impact of the price reform will be cushioned by compensation for workers in budgetary institutions, enterprises, state farms, those dependent on the social safety net, and poor farmers in mountainous regions. Other structural reforms under the program include the creation of a modern financial sector, the strengthening of the tax administration, the introduction of a property/land tax, agricultural and land reform, and enterprise reform through privatization, liquidation, or restructuring.
 Albania joined the IMF on Oct. 15, 1991, and its quota(B) is SDR 35.3 million (about US$49 million). Albania's outstanding financial obligations to the IMF currently total SDR 13.1 million (about US$18 million).
 (A) The ESAF is the IMF's concessional lending window for assisting its low-income members that are undertaking structural economic programs to strengthen substantially and, in a sustainable manner, their balance of payments position. The loans carry an interest rate of 0.5 percent and are repayable over 10 years with a grace period of five and a half years.
 (B) A member's quota in the IMF determines, in particular, the amount of its subscription, its voting weight, its access to IMF financing and its allocation of SDRs.
 -0- 7/14/93
 /CONTACT: International Monetary Fund, External Relations Department, 202-623-7100/


CO: International Monetary Fund ST: District of Columbia IN: FIN SU:

DC-IH -- DC028 -- 1660 07/14/93 18:17 EDT
COPYRIGHT 1993 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Jul 14, 1993
Words:713
Previous Article:INTERNATIONAL MONETARY FUND APPROVES DRAWING BY GHANA
Next Article:GRAND TRAVERSE RESORT ANNOUNCES REDUCTION OF GOLF RATES


Related Articles
INTERNATIONAL MONETARY FUND APPROVES LOAN FOR GUYANA
IMF APPROVES USE OF RESOURCES BY ZIMBABWE
IMF APPROVES LOAN FOR ALBANIA UNDER ESAF
ERITREA NOW ELIGIBLE TO RECEIVE IMF ESAF LOANS
IMF approves $744 million loan to underpin Iraq's economic program.

Terms of use | Copyright © 2017 Farlex, Inc. | Feedback | For webmasters