15.7% of the budget used for debts

The Albanian government will pay 641 million USD for paying its debt during 2013. Most of this bill is made of the interests, and the lowest part will be used for paying the loans that Albania has received in the past years. Compared to this year, the bill for debt services will have a burden of 8.4 billion ALL, and the budget will increase with 12 billion ALL in total.

This means that 70% of the budget increase will not go to support the priority sectors such as education, health or the citizens in need, but to the debt.

The high interests and small budget put Albania among the countries with the highest budget percentage going to pay debts. Figures show that the bill has increased year after year for a series of reasons.

In 2013, the interests and loans would reach 15.7% of all budget expenses, which is the highest in Europe and could be compared with countries that are in deep financial crisis, like Greece.

In the following relation of the draft-budget, the Ministry of Finances says that most of the reasons why the bill is getting bigger relates to the debt structure changes, which have oriented the loans to long-term loans in foreign markets.

But there are other reasons too why the bill is getting larger, and first of all it’s the national debt increase, which in the next year is expected to mount up to 8.9 billion USD, or 62.6 % of the National GDP. The second reason is related to the payments of loans that Albania has received during the first years of transition and now it is the time to pay them. In 2013, the government will pay 130 million USD in loans that have been taken in the past. The high debt bill removes funds for other budget needs. According to the World Bank, if Albania would decrease the debt to the same level of the other economies of the region, the saved funds would half the number of poor people in the country.

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