The expensive bill of economic growth
17/05/2011 16:35
Opposition demonstrators clash with the police in the protest in front of Tirana municipality, foreign embassies condemn acts of violence 19/04 16:00
Albania getting out of the low-income countries list is not only good
news, but it is also accompanied by a financial bill regarding high debt
levels.
Official data of the Finance Ministry show that by the end of 2006, Albania’s foreign debt was around 1.1 billion Euros. More than 81% of this debt consisted on concession loans with low norms and fixed interest. The burden of the commercial debts with high interest was only 19%. From that time, the foreign debt has changed radically. Data suggest that compared to 2006, the foreign debt has doubled, reaching 2.2 billion Euros.
Greatest part of the new debt has come from abroad. In the last three years it has been in the form of commercial loans. The interests are many times higher than the loans that Albania has received in 20 years from development institutions like the World Bank, EBRD and others. By the end of 2010, half of Albania’s foreign debt was on commercial loans.
Only in the recent two years, the interests of foreign debt increased with 2.5 times, from 29 million USD in 2008 to 73 million USD in 2010. According to governmental data, foreign debts will increase again this year with 80 million USD.
Hundreds of millions in soft loans from the World Bank, IMF and EBRD have impacted the economic growth by stabilizing the low finances of our country impoverished after the early ’90s and ‘97. This source is now drying up and if Albania will not advance with the integration in order to receive other loans from the European Union, the only financial option that remain is the commercial loan, which has high interest rates like Eurobond.
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