Fiscal rule for public debt

“We will start a new discussion for implementing a new fiscal rule, for a better order of the market expectancies and businesses. The fiscal rule will discipline the fiscal policy for mid-term and long-term stability of the public finances, mainly for the public debt”, declared Shkelqim Cani, Minister of Finances.

But the passing of a law that would stop the government from increasing a debt requires discipline from two sectors that threaten the financial stability: pensions and the energy sector.

“The most concerning, problematic and with pain will be the energy reform”, Minister Cani declared.

Cani released these declarations during a meeting with World Bank experts, who have introduced the results of a detailed study about Albania’s public finances. According to them, the solution of the energy crisis is critical for the financial stability.

“If nothing is done in a mid-term phase, the public debt will remain 76% of the Gross Domestic Product, but if all risks coming from the energy sector are included, it might go up to 83%. Without intervention, the public debt is unstable. With reforms in pension, the interventions with the taxes and the energy reform might put that into a stable decreasing trajectory”, declared Abebe Adunga, Chief Economist for Europe and Asia.

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