Fund Relations

(As of December 31, 2013)

Membership Status: Joined October 15, 1991; Article XIV.

General Resources Account:

	SDR Million	Percent Quota
Quota	60.00	100.00
Fund Holdings of Currency	59.51	99.18
Reserve Position	6.18	10.30

View Table

	SDR Million	Percent Quota
Quota	60.00	100.00
Fund Holdings of Currency	59.51	99.18
Reserve Position	6.18	10.30

SDR Department:

	SDR Million	Percent Allocation
Net cumulative allocation	46.45	100.00
Holdings	66.98	144.19

View Table

	SDR Million	Percent Allocation
Net cumulative allocation	46.45	100.00
Holdings	66.98	144.19

Outstanding Purchases and Loans:

	SDR Million	Percent Quota
Extended Arrangement	5.68	9.47
ECF Arrangements	10.70	17.83

View Table

	SDR Million	Percent Quota
Extended Arrangement	5.68	9.47
ECF Arrangements	10.70	17.83

Financial Arrangements:

	Approval	Expiration	Amount Approved	Amount Drawn
Type	Date	Date	(SDR Million)	(SDR Million)
ECF1	2/01/2006	1/31/2009	8.52	8.52
EFF	2/01/2006	1/31/2009	8.52	8.52
ECF1	6/21/2002	11/20/2005	28.00	28.00

View Table

	Approval	Expiration	Amount Approved	Amount Drawn
Type	Date	Date	(SDR Million)	(SDR Million)
ECF1	2/01/2006	1/31/2009	8.52	8.52
EFF	2/01/2006	1/31/2009	8.52	8.52
ECF1	6/21/2002	11/20/2005	28.00	28.00

Projected Obligations to Fund:

(SDR Million,; based on existing use of resources and present holdings of SDRs);

	Forthcoming
	2014	2015	2016	2017
Principal	5.80	4.32	2.90	2.01
Charges/Interest	0.06	0.05	0.03	0.01
Total	5.86	4.38	2.93	2.01

View Table

	Forthcoming
	2014	2015	2016	2017
Principal	5.80	4.32	2.90	2.01
Charges/Interest	0.06	0.05	0.03	0.01
Total	5.86	4.38	2.93	2.01

Safeguards Assessments: A safeguards assessment mission will take place in February 2014 and the assessment will be issued soon after. The last safeguards assessment of the Bank of Albania, completed on July 14, 2006, found that some weaknesses existed in the central bank’s safeguards framework. The main vulnerabilities identified by the assessment concerned the quality of the external audit, lack of audit committee oversight of the external and internal audit functions and the system of internal controls, and certain weaknesses in the controls over the Fund data reporting process. Subsequent to the assessment completion, external audit quality has been improved by adding a cosignatory from a larger office of the audit firm, and the data reporting process was modified as recommended. The authorities are working to address remaining vulnerabilities in the internal audit function, but have not yet established an audit committee.

Exchange Rate Arrangement: On July 1, 1992 the Albanian authorities adopted a floating exchange rate system. The de jure exchange rate system is classified as free floating, but the de facto exchange rate arrangement is floating, with the monetary authorities occasionally intervening in the foreign exchange market in order to avoid excessive and short-term disruptions in the functioning of the market and to accumulate reserves. The country still avails itself of the transitional arrangements under Article XIV and maintains an exchange restriction in the form of outstanding debit balances on inoperative bilateral payment agreements, which were in place before Albania became a Fund member. These relate primarily to debt in nonconvertible and formerly nonconvertible currencies. Albania maintains two further exchange restrictions inconsistent with Article VIII, Sections 2(a) and 3 under the IMF’s Articles: (i) an exchange restriction arising from the requirement for residents and nonresidents to submit a tax certificate that they do not owe any outstanding taxes prior to transferring foreign exchange for certain current transactions including the payment of moderate amounts for amortization of loans, the payment of certain insurance premium, and the transfer of profits and dividends from investments in Albania; and (ii) an exchange restriction arising from the requirement to provide customs clearance documents in respect of advance import payments prior to making payments for unrelated foreign exchange transactions. The exchange rate stood at lek 103.17 per U.S. dollar on November 30, 2013.

Article IV Consultation: The 2012 Article IV consultation was concluded on December 3, 2012 (IMF Country Report No. 13/7).

FSAP Participation and ROSCs: The most recent FSAP was carried out in November 2013 (Board date February 28, 2014). A data module ROSC was published on the Fund’s website in June 2000. A fiscal ROSC was completed in June 2003. Albania participates in the General Data Dissemination System (GDDS), and a complete set of GDDS metadata for the external, financial, fiscal, and real sectors, as well as for the socio-demographic indicators is posted on the Fund’s Dissemination Standards Bulletin Board (http://dsbb.imf.org). A data module ROSC reassessment using the Data Quality Assessment Framework was conducted in March 2006. A ROSC for assessing the Financial Action Task Force (FATF) recommendations for Anti-Money Laundering (AML) and Special Recommendations on Combating the Financing of Terrorism (CFT) was conducted in November 2010 and the report was published in July 2011.

Technical Assistance: The Fund, other multilateral organizations and donors have provided extensive assistance for institutional development in Albania. The Fund has sent several technical assistance missions to Albania every year since 1991. The extent and focus of Fund TA since FY 2008 is briefly listed below.

Table 1.

Albania—Technical Assistance since FY2008

Table 1.

Albania—Technical Assistance since FY2008

Department	Purpose	Date
FAD	Cash Management and Public Finance Strategy	May 2008
	Cash Forecasting and Management	October 2012
	Revenue Administration	October/November 2008
	Advice on IT Strategy and Business	April 2009; March 2010
	Process Reengineering
	Capacity Building in Taxpayer	November 2011
	Compliance and Information Technology
	Tax Administration	April 2009; March 2010; April 2011; April 2012; November 2013; January 2014
	Cash forecasting and management	October 2012
	Arrears Clearance and Prevention	November 2013
	Tax Policy	November 2013
LEGAL	Review of the Albanian AML/CFT law	August 2007
	TA on Repurchase Transactions Law	March 2008
	Banking Seminar for Judges and Bank	November 2008
	Regulators
	TA in Central Banking Law	April 2009
	TA on Payments Systems	May 2009
	ROSC on AML and CFT	Nov 2010
MCM	Monetary Policy	25 visits between June 2007 and April 2010;
	Management	June, July 2007
	Credit Registry	October 2007; January 2008
	Modeling and Forecasting	October 2007; March 2008
	Monetary Policy Strategy for Small	December 2007;
	Countries
	Banking Supervision	13 visits between February 2008 and March 2010;
	Delivery vs. Payment	April/May 2008
(together with LEGAL)	Central Bank Law	April 2009: February 2010
	Treasury Bill Registry	November 2009
	Modeling of Monetary Policy	December 2009; March, April, September 2010, January 2011, October 2011
Department	Purpose	Date
	Stress testing, liquidity testing	April 2011, July 2011, September 2011
	Contingency planning and Crisis Management	September 2011
	Basel II implementation	June 2013
	Stress testing	September 2013
STATISTICS	Balance of Payment Statistics	September–October 2007
	GDDS: Consultation	October 2007
	STE: Consumer Prices/Producer Price	November 2007
	LTE: Government Finance Statistics	February 2008
	STE National Accounts Statistics	5 visits between February 2008 and November 2009
	SDDS: Assessment	April, July 2010
	National Accounts Statistics	March 2011
	LTE: National Account Statistics	June 2012
	Producer Price Statistics	September 2013

View Table

Table 1.

Albania—Technical Assistance since FY2008

Department	Purpose	Date
FAD	Cash Management and Public Finance Strategy	May 2008
	Cash Forecasting and Management	October 2012
	Revenue Administration	October/November 2008
	Advice on IT Strategy and Business	April 2009; March 2010
	Process Reengineering
	Capacity Building in Taxpayer	November 2011
	Compliance and Information Technology
	Tax Administration	April 2009; March 2010; April 2011; April 2012; November 2013; January 2014
	Cash forecasting and management	October 2012
	Arrears Clearance and Prevention	November 2013
	Tax Policy	November 2013
LEGAL	Review of the Albanian AML/CFT law	August 2007
	TA on Repurchase Transactions Law	March 2008
	Banking Seminar for Judges and Bank	November 2008
	Regulators
	TA in Central Banking Law	April 2009
	TA on Payments Systems	May 2009
	ROSC on AML and CFT	Nov 2010
MCM	Monetary Policy	25 visits between June 2007 and April 2010;
	Management	June, July 2007
	Credit Registry	October 2007; January 2008
	Modeling and Forecasting	October 2007; March 2008
	Monetary Policy Strategy for Small	December 2007;
	Countries
	Banking Supervision	13 visits between February 2008 and March 2010;
	Delivery vs. Payment	April/May 2008
(together with LEGAL)	Central Bank Law	April 2009: February 2010
	Treasury Bill Registry	November 2009
	Modeling of Monetary Policy	December 2009; March, April, September 2010, January 2011, October 2011
Department	Purpose	Date
	Stress testing, liquidity testing	April 2011, July 2011, September 2011
	Contingency planning and Crisis Management	September 2011
	Basel II implementation	June 2013
	Stress testing	September 2013
STATISTICS	Balance of Payment Statistics	September–October 2007
	GDDS: Consultation	October 2007
	STE: Consumer Prices/Producer Price	November 2007
	LTE: Government Finance Statistics	February 2008
	STE National Accounts Statistics	5 visits between February 2008 and November 2009
	SDDS: Assessment	April, July 2010
	National Accounts Statistics	March 2011
	LTE: National Account Statistics	June 2012
	Producer Price Statistics	September 2013

Resident Representative: A Fund resident representative was posted in Tirana from April 1993 to August 2009. Ms. Ann-Margret Westin filled the position from August 2005 to August 2009.

World Bank Group Relations

The Republic of Albania has been a member of the World Bank since 1991. Since then, the WBG has provided strong support to Albania, including 72 IDA, IBRD and GEF projects in different sectors totaling US $1.4 billion, IFC investments of US$621 million, and MIGA guarantees totaling US$8.6 million. The quality of the active portfolio has continued to improve, with an increasing focus on long-term capacity development and implementation through Government structures.

The National Strategy for Development and Integration (NSDI) for 2007-2013 outlined the Government’s economic and social development program. The strategic goals of the NSDI were: (i) integration to the European Union (EU), strengthening the rule of law and democratization; and (iii) achieving rapid and sustainable economic and social development. The authorities have made progress towards the NSDI goals. First, Albania joined NATO in 2008 and submitted its application for EU membership in 2009. In November 2010, the European Commission found out that “negotiations for accession to the EU should be opened with Albania once the country has achieved the necessary degree of compliance with the membership criteria.” Second, its GDP growth continued throughout the global financial crisis, while poverty continued to decline. However, despite adopting some business environment reforms, Albania declined in its overall ranking on the World Bank’s 2014 Doing Business (DB) Indicators to the 90th position.

The new Government, which took office in September 2013, is in the process of revising the draft National Strategy for Development and Integration (NSDI) for 2014–2020. The Strategy for 2014–2020 is expected to be finalized by September 2014. The current draft, which is undergoing a consultative process, has three broad pillars or overarching goals: (i) to prepare Albania to become a full member of the European Union; (ii) to foster strong and sustained economic growth; and (iii) to transform growth and enhanced wealth into improved well-being for all citizens in a fair and cohesive society. These broad goals are to be advanced through measures in four key areas: (i) good governance, democracy and rule of law; (ii) growth through fiscal stability and increased competitiveness, forming Pillar I; (iii) sustainable growth through efficient use of resources, forming Pillar II; and (iii) investing in people and social cohesion, forming Pillar III.

The current Bank Group Country Partnership Strategy (CPS) for 2011–14 supports the Government’s National Strategy for Development and Integration by focusing on three strategic objectives: (i) supporting Albania’s economic recovery and growth in a crisis-affected Europe; (ii) broadening and sustaining Albania’s social gains; and (iii) reducing vulnerability to climate change and natural disasters. The CPS program also supports governance improvements in Albania and the EU integration agenda. It focuses on accelerating the implementation of the ongoing program, while selectively introducing new IBRD lending in strategic areas, increasing IFC financing for the private sector to US$120–150 million, strengthening partnerships with other IFIs and donors, and expanding its knowledge program through regional and national activities. As part of its initiative to help several countries in Central, East, and South East Europe mitigate the impacts of the Eurozone crisis, the IBRD has increased the financing envelope available to Albania under the CPS, initially set at around US$300 million, to US$575 million, mainly for strengthening financial stability, macroeconomic management, and growth. The Progress Report has been prepared reconfirming CPS priorities, with an increased focus on supporting growth, competitiveness, and energy sector development.

The 2010 CAS proposed a lending range of US$ 75–US$ 196 million, with actual lending to have been determined by the pace of reform in key sectors. The current portfolio consists of five projects totaling US$200 million in IDA credits and IBRD loans. The portfolio has been consolidating significantly in the past few years, from 18 projects at the end of FY09 to five projects by FY13. Portfolio performance as measured by disbursement improved in FY11, with 22 percent, and FY12 with 24 percent, but it was 17 percent in FY13, partly because of some new projects and also because of deteriorating macro-fiscal performance, forcing the Government to cut expenditure even under IFI financing and leading to arrears under several projects. In order to improve performance, a number of steps taken in collaboration with the Government to simplify and streamline the portfolio, restructure problem projects, and introduce regular portfolio performance reviews have produced results.

Albania: Bank-Fund Joint Management Action Plan Matrix

(As of January 2014)

Albania: Bank-Fund Joint Management Action Plan Matrix

(As of January 2014)

Title	Product	Provisional Timing of Missions	Expected Delivery date
A. Mutual information on relevant work programs
The World Bank work program in the next 12 months	Environmental Services Project	March 2014	May 2014
	Energy Sector Recovery Project	March 2014	May 2014
	Financial Sector Modernization Loan	March 2014	May 2014
	Public Finance and Growth Loan	February 2014	May 2014
The Fund work program in the next 12 months	Program review:
	First review of the EFF arrangement	April 2014	Board meeting in June 2014
	Second review of the EFF arrangement	August 2014	Board meeting in September 2014
	Third review of the EFF arrangement	November 2014	Board meeting in December 2015
	Technical assistance:
	Monetary and financial sector
	Safeguard assessment Fiscal sector	1 missions	Ongoing
	Strengthening tax compliance	1 missions	Ongoing
	Public financial management	2 missions	Ongoing
	Statistics National accounts statistics	1 mission	Ongoing
B. Requests for work program inputs (as needed)
Fund request to Bank	Growth diagnostics, assessment of competitiveness, and related structural reforms (e.g., electricity sector) Fiscal governance and PEM Public expenditure reform needs (in particular civil service and pension reforms) Nonbank financial sector development
Bank request to Fund	Periodic macro updates Joint approach to advisory work on institutional reform at the MoF in debt management Debt Sustainability Analysis

View Table

Albania: Bank-Fund Joint Management Action Plan Matrix

(As of January 2014)

Title	Product	Provisional Timing of Missions	Expected Delivery date
A. Mutual information on relevant work programs
The World Bank work program in the next 12 months	Environmental Services Project	March 2014	May 2014
	Energy Sector Recovery Project	March 2014	May 2014
	Financial Sector Modernization Loan	March 2014	May 2014
	Public Finance and Growth Loan	February 2014	May 2014
The Fund work program in the next 12 months	Program review:
	First review of the EFF arrangement	April 2014	Board meeting in June 2014
	Second review of the EFF arrangement	August 2014	Board meeting in September 2014
	Third review of the EFF arrangement	November 2014	Board meeting in December 2015
	Technical assistance:
	Monetary and financial sector
	Safeguard assessment Fiscal sector	1 missions	Ongoing
	Strengthening tax compliance	1 missions	Ongoing
	Public financial management	2 missions	Ongoing
	Statistics National accounts statistics	1 mission	Ongoing
B. Requests for work program inputs (as needed)
Fund request to Bank	Growth diagnostics, assessment of competitiveness, and related structural reforms (e.g., electricity sector) Fiscal governance and PEM Public expenditure reform needs (in particular civil service and pension reforms) Nonbank financial sector development
Bank request to Fund	Periodic macro updates Joint approach to advisory work on institutional reform at the MoF in debt management Debt Sustainability Analysis

Statistical Issues

ALBANIA—STATISTICAL ISSUES APPENDIX

(As of January 31, 2014)

ALBANIA—STATISTICAL ISSUES APPENDIX

(As of January 31, 2014)

I. Assessment of Data Adequacy for Surveillance
General: Data provision has some shortcomings, but is broadly adequate for surveillance. The main obstacles are in real sector statistics.
National Accounts: The weaknesses in national accounts are mainly due to poor source data. While technical assistance has been provided on methodological procedures, source data still do not provide sufficient information to compile reliable estimates, especially on the unobserved economy. The long lag in handling certain source data, e.g., the Structural Business Survey (SBS), also hampers the timeliness of annual GDP publication, which is currently around 13 months after the year. INSTAT is considering adopting partial electronic survey reporting, which can potentially shorten the processing time for the SBS, but would require considerable resources. Quality and timeliness of national accounts can also be improved by better inter-government agency data sharing of administrative data. But without speeding up source data processing, timeliness of GDP publication is not likely to improve in the short run.
INSTAT has benefited from technical assistance from the Fund and the European Union, mainly to address weaknesses in methodology, basic data sources, and coverage of the private sector. The Labor Force Survey was incorporated into the estimates of the unobserved economy in the annual national accounts while attempts were made to use the Household Budget Survey to develop a new benchmark estimate of private consumption. A new methodology for gross fixed capital formation based on a commodity flow approach was developed. Due to severe resource constraints at INSTAT, the improvement in the national accounts has been relatively slow. INSTAT is currently working on adopting the ESA95 methodology. The revised methodology for GDP compilation will, among other things, render more comprehensive coverage of the informal economy. INSTAT plans to revised annual GDP numbers for 2008–2011 using the new methodology in Q2:2014.
The quarterly GDP is published with a lag of over 90 days, using the so-called indirect method based on selected indicators and certain statistical assumptions. Due to differences in compilation methods, there are large discrepancies between the aggregated quarterly GDPs and the annual GDP estimates.
Labor statistics: The quality of Labor Force Survey (LFS) is of insufficient quality, which in turn affects the quality of employment/unemployment data. Remote areas are under surveyed due to resource constraints. The treatment of agricultural employment needs to improve, as currently all individuals that own agricultural land is considered self-employed by the survey. Various short-comings in LFS lead to the lack of variation in the employment/unemployment data.
Price statistics: Compilation generally follows international standards, and the estimation of imputed rent within the CPI was improved in 2003. In December 2007, INSTAT updated the CPI weights using the results of a new national-level HBS conducted during the period October 2006–September 2007. PPI has been published only quarterly due to financial constraints. The weights were derived from the Structural Business Survey of two years before.
Government finance statistics: Fiscal source data is sufficiently adequate to allow a broad presentation of the Albanian general government’s fiscal operations in line with to the Government Finance Statistics Manual 2001 (GFSM 2001) framework. Transitioning to the GFSM 2001 fiscal presentation does not appear to substantially change the overall picture (Appendix Table 1). However, transitioning also necessities further improvements in the alignment of the fiscal statistics, above all by (i) providing greater detail on some of accounts (such as National Taxes, Income of Budgetary Institutions, Property Compensation, and Compensation for Electricity); (ii) reporting transactions of Albania’s local governments in a separate statement instead of with the general government; (iii) breaking down the Net Acquisition of Nonfinancial assets (labeled as Capital Expenditure in the local presentation) into the GFSM 2001 subcategories (i.e., fixed assets, inventories, valuables, and nonproduced assets); and (iv) breaking down the financing section into net acquisition of financial assets and net acquisition of liabilities (and their respective instruments).
Monetary statistics: The monetary data compilation framework conforms to the methodology recommended in the Monetary and Financial Statistics Manual (MFSM) 2000. The depository corporations’ survey covers the Bank of Albania (BoA) and all the other deposit-taking institutions (commercial banks and savings and loans associations (SLAs)). The accounts of the SLAs, with the exception of loans, are produced on a cash basis, which contrasts with the MFSM’s recommendations of accrual accounting. Another deviation from the MFSM’s methodology is that the BoA’s and commercial banks’ holdings of nontradable long-term securities are recorded at book value.
External sector statistics: The Balance of payments data is compiled by the BoA with a time lag of less than 90 days, and is methodologically sound, though some of the estimates, particularly for international transactions outside the banking system, need to be refined. Problems remain in the areas of service transactions and remittances, and in the monitoring of financial account transactions, foreign assistance (grants from abroad to regional and local governments are underreported), and external debt.
The estimation methods for transactions outside the banking system (mostly remittances and investment transactions by nonresident Albanians) require further improvement, though this is arguably a less concern going forward as remittances are more and more channeled through the banking system. The BoA will conduct a household survey in 2014 to improve the accuracy of remittance estimates.
The external debt database ensures timely and accurate reporting of external government debt (including commitments of state-owned enterprises). The collection of data on external grants (EG) is not timely and only covers the central government. The BoA is working on revising the EG numbers.
The International Investment Position (IIP) data is compiled annually by the BoA, which plans to shorten the timeliness of publication—currently 15 months after the year—to 9 months in 2014.
II. Data Standards and Quality
Albania participates in the General Data Dissemination System (GDDS).	Data ROSC published in October 2006.

View Table

ALBANIA—STATISTICAL ISSUES APPENDIX

(As of January 31, 2014)

I. Assessment of Data Adequacy for Surveillance
General: Data provision has some shortcomings, but is broadly adequate for surveillance. The main obstacles are in real sector statistics.
National Accounts: The weaknesses in national accounts are mainly due to poor source data. While technical assistance has been provided on methodological procedures, source data still do not provide sufficient information to compile reliable estimates, especially on the unobserved economy. The long lag in handling certain source data, e.g., the Structural Business Survey (SBS), also hampers the timeliness of annual GDP publication, which is currently around 13 months after the year. INSTAT is considering adopting partial electronic survey reporting, which can potentially shorten the processing time for the SBS, but would require considerable resources. Quality and timeliness of national accounts can also be improved by better inter-government agency data sharing of administrative data. But without speeding up source data processing, timeliness of GDP publication is not likely to improve in the short run.
INSTAT has benefited from technical assistance from the Fund and the European Union, mainly to address weaknesses in methodology, basic data sources, and coverage of the private sector. The Labor Force Survey was incorporated into the estimates of the unobserved economy in the annual national accounts while attempts were made to use the Household Budget Survey to develop a new benchmark estimate of private consumption. A new methodology for gross fixed capital formation based on a commodity flow approach was developed. Due to severe resource constraints at INSTAT, the improvement in the national accounts has been relatively slow. INSTAT is currently working on adopting the ESA95 methodology. The revised methodology for GDP compilation will, among other things, render more comprehensive coverage of the informal economy. INSTAT plans to revised annual GDP numbers for 2008–2011 using the new methodology in Q2:2014.
The quarterly GDP is published with a lag of over 90 days, using the so-called indirect method based on selected indicators and certain statistical assumptions. Due to differences in compilation methods, there are large discrepancies between the aggregated quarterly GDPs and the annual GDP estimates.
Labor statistics: The quality of Labor Force Survey (LFS) is of insufficient quality, which in turn affects the quality of employment/unemployment data. Remote areas are under surveyed due to resource constraints. The treatment of agricultural employment needs to improve, as currently all individuals that own agricultural land is considered self-employed by the survey. Various short-comings in LFS lead to the lack of variation in the employment/unemployment data.
Price statistics: Compilation generally follows international standards, and the estimation of imputed rent within the CPI was improved in 2003. In December 2007, INSTAT updated the CPI weights using the results of a new national-level HBS conducted during the period October 2006–September 2007. PPI has been published only quarterly due to financial constraints. The weights were derived from the Structural Business Survey of two years before.
Government finance statistics: Fiscal source data is sufficiently adequate to allow a broad presentation of the Albanian general government’s fiscal operations in line with to the Government Finance Statistics Manual 2001 (GFSM 2001) framework. Transitioning to the GFSM 2001 fiscal presentation does not appear to substantially change the overall picture (Appendix Table 1). However, transitioning also necessities further improvements in the alignment of the fiscal statistics, above all by (i) providing greater detail on some of accounts (such as National Taxes, Income of Budgetary Institutions, Property Compensation, and Compensation for Electricity); (ii) reporting transactions of Albania’s local governments in a separate statement instead of with the general government; (iii) breaking down the Net Acquisition of Nonfinancial assets (labeled as Capital Expenditure in the local presentation) into the GFSM 2001 subcategories (i.e., fixed assets, inventories, valuables, and nonproduced assets); and (iv) breaking down the financing section into net acquisition of financial assets and net acquisition of liabilities (and their respective instruments).
Monetary statistics: The monetary data compilation framework conforms to the methodology recommended in the Monetary and Financial Statistics Manual (MFSM) 2000. The depository corporations’ survey covers the Bank of Albania (BoA) and all the other deposit-taking institutions (commercial banks and savings and loans associations (SLAs)). The accounts of the SLAs, with the exception of loans, are produced on a cash basis, which contrasts with the MFSM’s recommendations of accrual accounting. Another deviation from the MFSM’s methodology is that the BoA’s and commercial banks’ holdings of nontradable long-term securities are recorded at book value.
External sector statistics: The Balance of payments data is compiled by the BoA with a time lag of less than 90 days, and is methodologically sound, though some of the estimates, particularly for international transactions outside the banking system, need to be refined. Problems remain in the areas of service transactions and remittances, and in the monitoring of financial account transactions, foreign assistance (grants from abroad to regional and local governments are underreported), and external debt.
The estimation methods for transactions outside the banking system (mostly remittances and investment transactions by nonresident Albanians) require further improvement, though this is arguably a less concern going forward as remittances are more and more channeled through the banking system. The BoA will conduct a household survey in 2014 to improve the accuracy of remittance estimates.
The external debt database ensures timely and accurate reporting of external government debt (including commitments of state-owned enterprises). The collection of data on external grants (EG) is not timely and only covers the central government. The BoA is working on revising the EG numbers.
The International Investment Position (IIP) data is compiled annually by the BoA, which plans to shorten the timeliness of publication—currently 15 months after the year—to 9 months in 2014.
II. Data Standards and Quality
Albania participates in the General Data Dissemination System (GDDS).	Data ROSC published in October 2006.

Table 1.

Albania: Statement of Operations–General Government, 2009–19

(Billions of leks)

Sources: Albanian authorities; and IMF staff estimates and projections.

Table 1.

Albania: Statement of Operations–General Government, 2009–19

(Billions of leks)

			2009	2010	2011	2012	2013	2014	2015	2016	2017	2018	2019
							Est.			Projection
Revenue			299.0	319.6	330.4	330.4	325.8	360.8	379.5	405.6	435.4	466.9	502.4
	Taxes		221.0	235.0	247.3	243.4	233.8	267.2	283.0	302.5	324.8	348.7	375.6
	Social contributions		49.8	53.8	56.6	57.4	60.0	63.8	67.6	72.4	77.7	83.4	89.8
	Grants		4.4	4.6	3.8	5.6	7.9	8.5	6.5	6.7	7.1	7.1	7.1
	Other revenue		23.7	26.2	22.7	24.0	24.1	21.2	22.4	24.0	25.8	27.7	29.8
Expenditure			385.3	371.5	376.2	374.2	409.4	420.1	449.5	482.0	515.7	551.0	588.8
	Expense		283.9	299.9	305.6	312.6	332.1	353.5	379.4	407.0	435.2	464.5	495.7
		Compensation of employees	62.4	65.8	67.4	69.4	71.6	74.0	78.4	83.9	90.1	96.7	104.1
		Use of goods and services	32.1	33.3	33.0	31.8	35.0	35.3	37.4	40.0	43.0	46.1	49.6
		Interest	36.3	41.6	41.1	41.5	43.9	46.0	62.3	67.2	70.6	72.8	74.2
		Subsidies	2.0	3.5	3.3	1.9	1.6	1.6	1.8	2.0	2.1	2.0	2.1
		Grants	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0
		Social benefits	117.6	124.9	132.6	140.6	151.4	159.2	168.7	180.8	194.0	208.7	224.7
		Other expense	33.6	30.8	28.1	27.3	28.6	37.4	30.9	33.1	35.5	38.1	41.0
	Net acquisition of nonfinancial assets		101.4	71.6	70.6	61.7	77.3	66.7	70.1	75.0	80.6	86.5	93.1
		Domestically financed	81.1	50.7	42.7	27.4	37.4	28.1	29.2	31.3	33.6	36.1	38.8
		Foreign financed	20.3	20.9	27.9	34.3	39.9	38.6	40.9	43.8	47.0	50.5	54.3
Unidentified measures (cumulative)								0.0	17.7	39.0	57.6	74.1	85.8
Gross Operating Balance			15.1	19.7	24.8	17.8	-6.3
Net lending/borrowing			-86.3	-51.8	-45.7	-43.9	-83.6	-59.4	-52.3	-37.4	-22.7	-9.9	-0.7
Transaction in financial assets and liabilities			-86.3	-51.8	-45.7	-43.9	-83.6	-59.4	-52.3	-37.4	-22.7	-9.9	-0.7
	Net acquisition of financial assets		-27.6	-10.1	-0.4	0.8	-15.8	-0.4	0.0	0.0	0.0	0.0	0.0
		Domestic	-27.6	-10.1	-0.4	0.8	-15.8	-0.4	0.0	0.0	0.0	0.0	0.0
		Foreign	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0
	Net incurrence of liabilities		58.8	41.7	45.3	44.6	67.7	59.0	52.3	37.4	22.7	9.9	0.7
		Domestic	16.4	16.4	24.4	29.1	54.1	6.7	4.7	7.2	40.4	39.7	26.9
		Foreign	42.4	25.4	20.9	15.6	13.6	52.2	47.6	30.2	-17.7	-29.8	-26.2

Sources: Albanian authorities; and IMF staff estimates and projections.

View Table

Table 1.

Albania: Statement of Operations–General Government, 2009–19

(Billions of leks)

			2009	2010	2011	2012	2013	2014	2015	2016	2017	2018	2019
							Est.			Projection
Revenue			299.0	319.6	330.4	330.4	325.8	360.8	379.5	405.6	435.4	466.9	502.4
	Taxes		221.0	235.0	247.3	243.4	233.8	267.2	283.0	302.5	324.8	348.7	375.6
	Social contributions		49.8	53.8	56.6	57.4	60.0	63.8	67.6	72.4	77.7	83.4	89.8
	Grants		4.4	4.6	3.8	5.6	7.9	8.5	6.5	6.7	7.1	7.1	7.1
	Other revenue		23.7	26.2	22.7	24.0	24.1	21.2	22.4	24.0	25.8	27.7	29.8
Expenditure			385.3	371.5	376.2	374.2	409.4	420.1	449.5	482.0	515.7	551.0	588.8
	Expense		283.9	299.9	305.6	312.6	332.1	353.5	379.4	407.0	435.2	464.5	495.7
		Compensation of employees	62.4	65.8	67.4	69.4	71.6	74.0	78.4	83.9	90.1	96.7	104.1
		Use of goods and services	32.1	33.3	33.0	31.8	35.0	35.3	37.4	40.0	43.0	46.1	49.6
		Interest	36.3	41.6	41.1	41.5	43.9	46.0	62.3	67.2	70.6	72.8	74.2
		Subsidies	2.0	3.5	3.3	1.9	1.6	1.6	1.8	2.0	2.1	2.0	2.1
		Grants	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0
		Social benefits	117.6	124.9	132.6	140.6	151.4	159.2	168.7	180.8	194.0	208.7	224.7
		Other expense	33.6	30.8	28.1	27.3	28.6	37.4	30.9	33.1	35.5	38.1	41.0
	Net acquisition of nonfinancial assets		101.4	71.6	70.6	61.7	77.3	66.7	70.1	75.0	80.6	86.5	93.1
		Domestically financed	81.1	50.7	42.7	27.4	37.4	28.1	29.2	31.3	33.6	36.1	38.8
		Foreign financed	20.3	20.9	27.9	34.3	39.9	38.6	40.9	43.8	47.0	50.5	54.3
Unidentified measures (cumulative)								0.0	17.7	39.0	57.6	74.1	85.8
Gross Operating Balance			15.1	19.7	24.8	17.8	-6.3
Net lending/borrowing			-86.3	-51.8	-45.7	-43.9	-83.6	-59.4	-52.3	-37.4	-22.7	-9.9	-0.7
Transaction in financial assets and liabilities			-86.3	-51.8	-45.7	-43.9	-83.6	-59.4	-52.3	-37.4	-22.7	-9.9	-0.7
	Net acquisition of financial assets		-27.6	-10.1	-0.4	0.8	-15.8	-0.4	0.0	0.0	0.0	0.0	0.0
		Domestic	-27.6	-10.1	-0.4	0.8	-15.8	-0.4	0.0	0.0	0.0	0.0	0.0
		Foreign	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0
	Net incurrence of liabilities		58.8	41.7	45.3	44.6	67.7	59.0	52.3	37.4	22.7	9.9	0.7
		Domestic	16.4	16.4	24.4	29.1	54.1	6.7	4.7	7.2	40.4	39.7	26.9
		Foreign	42.4	25.4	20.9	15.6	13.6	52.2	47.6	30.2	-17.7	-29.8	-26.2

Sources: Albanian authorities; and IMF staff estimates and projections.

Albania: Table of Common Indicators Required for Surveillance

As of January 31, 2014

¹Any reserve assets that are pledged or otherwise encumbered should be specified separately. Also, data should comprise short-term liabilities linked to a foreign currency but settled by other means as well as the notional values of financial derivatives to pay and to receive foreign currency, including those linked to a foreign currency but settled by other means.

²Both market-based and officially determined, including discount rates, money market rates, rates on treasury bills, notes and bonds.

³Foreign, domestic bank, and domestic nonbank financing.

⁴The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds) and state and local governments.

⁵Including currency and maturity composition.

⁶Includes external gross financial asset and liability positions vis-à-vis nonresidents. The IIP is currently being developed by the Albanian authorities and is not yet published. The authorities will publish the data once quality checks have been completed.

⁷Daily (D), Weekly (W), Monthly (M), Quarterly (Q), Annually (A), Irregular (I); Not Available (NA).

⁸Reflects the assessment provided in the data ROSC published on October 31, 2006, and based on the findings of the mission that took place March 8–22, 2006, for the dataset corresponding to the variable in each row. The assessment indicates whether international standards concerning concepts and definitions, scope, classification/sectorization, and basis for recording are fully observed (O), largely observed (LO), largely not observed (LNO), or not observed (NO).

⁹Same as footnote 8, except referring to international standards concerning source data, assessment of source data, statistical techniques, assessment and validation of intermediate data and statistical outputs, and revision studies.

Albania: Table of Common Indicators Required for Surveillance

As of January 31, 2014

	Date of Latest Observation	Date Received	Frequency of Data7	Frequency of Reporting7	Frequency of Publication7	Memo Items:
						Data Quality – Methodological Soundness8	Data Quality – Accuracy and Reliability9
Exchange Rates	1/30/14	1/30/14	D	D	D
International Reserve Assets and Reserve Liabilities of the Monetary Authorities1	11/13	12/15/13	D	W	M
Reserve/Base Money	11/13	12/15/13	M	M	M
Broad Money	11/13	12/30/13	M	M	M	O, O , O , LO	O, LO, LO, O, O
Central Bank Balance Sheet	11/13	12/15/13	M	M	M
Consolidated Balance Sheet of the Banking System	11/13	12/30/13	M	M	M
Interest Rates2	1/30/14	1/20/14	D	D	D
Consumer Price Index	12/13	1/15/14	M	M	M	O, LO, O, LO	LO, LO, LO, O, O
Revenue, Expenditure, Balance and Composition of Financing3 – General Government4	12/13	1/30/14	M	M	M	LO, O, O, O	LO, O, O, O, O
Revenue, Expenditure, Balance and Composition of Financing3 – Central Government	12/13	1/30/14	M	M	M
Stocks of Central Government and Central Government-Guaranteed Debt5	12/13	1/30/14	Q	Q	A
External Current Account Balance	2013:Q3	12/10/13	Q	I	I	O, O, O, LO	LNO, O, LO, LO, O
Exports and Imports of Goods and Services	12/13	11/30/14	M	M	M
GDP/GNP	2013:Q3	12/15/13	Q	Q	Q	O, LNO, O, LO	LNO, O, LNO, LO, LO
Gross External Debt	2013:Q3	12/10/13	Q	I	Q
International Investment position6	2011	12/2/13	A	I	A

¹Any reserve assets that are pledged or otherwise encumbered should be specified separately. Also, data should comprise short-term liabilities linked to a foreign currency but settled by other means as well as the notional values of financial derivatives to pay and to receive foreign currency, including those linked to a foreign currency but settled by other means.

²Both market-based and officially determined, including discount rates, money market rates, rates on treasury bills, notes and bonds.

³Foreign, domestic bank, and domestic nonbank financing.

⁴The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds) and state and local governments.

⁵Including currency and maturity composition.

⁶Includes external gross financial asset and liability positions vis-à-vis nonresidents. The IIP is currently being developed by the Albanian authorities and is not yet published. The authorities will publish the data once quality checks have been completed.

⁷Daily (D), Weekly (W), Monthly (M), Quarterly (Q), Annually (A), Irregular (I); Not Available (NA).

⁸Reflects the assessment provided in the data ROSC published on October 31, 2006, and based on the findings of the mission that took place March 8–22, 2006, for the dataset corresponding to the variable in each row. The assessment indicates whether international standards concerning concepts and definitions, scope, classification/sectorization, and basis for recording are fully observed (O), largely observed (LO), largely not observed (LNO), or not observed (NO).

⁹Same as footnote 8, except referring to international standards concerning source data, assessment of source data, statistical techniques, assessment and validation of intermediate data and statistical outputs, and revision studies.

View Table

Albania: Table of Common Indicators Required for Surveillance

As of January 31, 2014

	Date of Latest Observation	Date Received	Frequency of Data7	Frequency of Reporting7	Frequency of Publication7	Memo Items:
						Data Quality – Methodological Soundness8	Data Quality – Accuracy and Reliability9
Exchange Rates	1/30/14	1/30/14	D	D	D
International Reserve Assets and Reserve Liabilities of the Monetary Authorities1	11/13	12/15/13	D	W	M
Reserve/Base Money	11/13	12/15/13	M	M	M
Broad Money	11/13	12/30/13	M	M	M	O, O , O , LO	O, LO, LO, O, O
Central Bank Balance Sheet	11/13	12/15/13	M	M	M
Consolidated Balance Sheet of the Banking System	11/13	12/30/13	M	M	M
Interest Rates2	1/30/14	1/20/14	D	D	D
Consumer Price Index	12/13	1/15/14	M	M	M	O, LO, O, LO	LO, LO, LO, O, O
Revenue, Expenditure, Balance and Composition of Financing3 – General Government4	12/13	1/30/14	M	M	M	LO, O, O, O	LO, O, O, O, O
Revenue, Expenditure, Balance and Composition of Financing3 – Central Government	12/13	1/30/14	M	M	M
Stocks of Central Government and Central Government-Guaranteed Debt5	12/13	1/30/14	Q	Q	A
External Current Account Balance	2013:Q3	12/10/13	Q	I	I	O, O, O, LO	LNO, O, LO, LO, O
Exports and Imports of Goods and Services	12/13	11/30/14	M	M	M
GDP/GNP	2013:Q3	12/15/13	Q	Q	Q	O, LNO, O, LO	LNO, O, LNO, LO, LO
Gross External Debt	2013:Q3	12/10/13	Q	I	Q
International Investment position6	2011	12/2/13	A	I	A

¹Any reserve assets that are pledged or otherwise encumbered should be specified separately. Also, data should comprise short-term liabilities linked to a foreign currency but settled by other means as well as the notional values of financial derivatives to pay and to receive foreign currency, including those linked to a foreign currency but settled by other means.

²Both market-based and officially determined, including discount rates, money market rates, rates on treasury bills, notes and bonds.

³Foreign, domestic bank, and domestic nonbank financing.

⁴The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds) and state and local governments.

⁵Including currency and maturity composition.

⁶Includes external gross financial asset and liability positions vis-à-vis nonresidents. The IIP is currently being developed by the Albanian authorities and is not yet published. The authorities will publish the data once quality checks have been completed.

⁷Daily (D), Weekly (W), Monthly (M), Quarterly (Q), Annually (A), Irregular (I); Not Available (NA).

⁸Reflects the assessment provided in the data ROSC published on October 31, 2006, and based on the findings of the mission that took place March 8–22, 2006, for the dataset corresponding to the variable in each row. The assessment indicates whether international standards concerning concepts and definitions, scope, classification/sectorization, and basis for recording are fully observed (O), largely observed (LO), largely not observed (LNO), or not observed (NO).

⁹Same as footnote 8, except referring to international standards concerning source data, assessment of source data, statistical techniques, assessment and validation of intermediate data and statistical outputs, and revision studies.