Albania Poverty Reduction Strategy Paper Annual Progress Report

This report presents the Joint Staff Assessment of the Poverty Reduction Strategy Paper Annual Progress Report (APR) for Albania. The second year of National Strategy for Socio-Economic Development (NSSED) implementation in Albania saw significant improvements in a number of areas, despite continuing political uncertainties and governance issues. The APR presents an appropriate analysis of poverty, recent economic developments, and sectoral reforms. The IMF staff commends the government for using information from the Living Standard Measurement Survey and other sources to analyze patterns in living standards and to enrich its previous diagnoses of poverty.

This paper examines the Progress Report for Albania’s National Strategy for Socio-Economic Development (NSSED). 2002 was the first year of implementing the NSSED. The implementation process has been oriented toward achieving the annual objectives and in accordance with the program of public priority measures for 2002–04. The experience gained in NSSED implementation, the definition and improvements to objectives and medium-term NSSED measures, the Millennium Development Goals, and Albania’s European integration objectives have all contributed to further improvements of the vision and medium and long-term NSSED objectives.

Executive Directors commended the authorities for their policies to maintain macroeconomic stability, which had resulted in favorable growth performance and zero inflation, and welcomed improvements in tax collection and encouraged the authorities to continue with their efforts to strengthen tax administration. The authorities are urged to proceed rapidly with structural reforms, in particular by improving governance further to ensure sustained growth and poverty reduction. Macroeconomic data, although adequate for program monitoring, continue to suffer from serious deficiencies, especially in the real sector.

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