The IMF Country Reports Series covers economic and financial developments and trends in member countries. Each report, prepared by a staff team after discussions with officials of the country, is published at the option of the member.
This paper describes economic developments in Albania during the 1990s. Macroeconomic performance deteriorated in 1996, as the fiscal stance was weakened ahead of the parliamentary elections in May. Although two large public sector wage increases contributed, it was mainly revenue shortfalls that drove the domestically financed budget deficit to more than 101/2 percent of GDP-the highest level since 1992. Reflecting higher demand in the economy, the trade deficit increased from 191/2 percent of GDP to 25 percent of GDP, and inflation nearly tripled to 171/2 percent.