IMF: Albania must reduce public debt

Gerwin Bell, head of the mission in Albania suggested that at this point, it is urgent for the government to reduce debts, reccomending two ways for realizing it.

“You could keep the current investment level and decrease public debt to 50% in the next five years, but for this you must freeze wages in real terms. If this appears to be difficult, the other way is to increase governmental revenues, such as insurances or the flat tax. Albania would still be competitive with a flat tax at 12% or 15%,” Bell declared.

But the government has another program for public finances. Finance Minister Ridvan Bode declared that government’s main objective is not to allow further debt increases. Bode excluded extreme measures.

“We will not plan to raise taxes. This can be fixed with the expenses”, Bode declared.

The demand for decreasing the government debt has also been made by Bank of Albania. Governor Fullani declared that high debts endanger economic growths,” Fullani declared.

“The economy would benefit in middle-term and long-term plans by decreasing the public debt”, Fullani declared.

The government was obliged to lower its prediction for the economic growth from 5.5% to 5%, although the International Monetary Fund had much lower expectancies, predicting a reduction of the consume level and slow export growth.

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