Finances deteriorate, less investments
17/09/2011 00:00
Linda Rama: Between Family, Work and Albania’s Future 18/08 14:30
The government finances deteriorated this August, because the tax
revenues were almost halted. The official data of the Ministry of
Finances indicate that only for the last month, the government collected
from the taxes and other sources almost 17 million USD less revenues
than the budget cut plan.
The shortfall figure for August was higher than the total of the past 7 months, until July. The revenue deficit in total, for 8 months, is 32.5 million USD.
The finances of the country are facing a hard period. The government has the hands tied with the finances since the country’s public debt is near the 60% limit, which cannot be surpassed by Parliament law. For keeping the debt under control, the government is obliged to compensate every shortfall in the revenues by cutting expenses, especially on investments.
The government cannot cut wages and pensions; therefore they are obliged to decrease the public investments. The data indicate that for the first eight months of the year, the investments were 37 million USD, or 6.1 less than what were approved in the budget. All cuts happened in August, when the government invested only half of what predicted.
The last years have shown that the sectors that endure more cuts in times of shortfalls are those of education and health, which start the budget as priority and end up with extreme cuts. Chances are that the government will ask the Parliament the right to make other budget amends through a normative act, as it has happened in the last years when the state budget was changed three times in one year, and the three times with cuts.
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