Government cuts investments
21/07/2012 00:00
Linda Rama: Between Family, Work and Albania’s Future 18/08 14:30
The government has been obliged to cut expenses for keeping the deficit
under control, which has increased beyond any limit for the first months
of the year.
The recent official data of the Ministry of Finances show that the public investments fell with 1.9 billion ALL during June, which is the lowest monthly figure of this year. In total, for the first six months, the public investments fell with 23.9 billion ALL, or 25 lower than the same period of one year ago.
The government has invested 83 million USD less than the first semester of the past year. The strong investment cut, which is among the few productive expenses of the government, after creating jobs and stimulating economic growth are being dictated by the weak progress with the revenues.
According to the official data, the revenues from taxes and other resources were 91 million USD for the first months of the year. This made the budget deficit to jump at 178% over the official plan, obliging the Ministry of Finances to increase the expensive debt in the interior market and to finance it.
The government debt in the domestic market for the first six months was 146 million USD, or 3.6 times more than the official prediction in the budget. The first semester data show that the public finances have deviated from the legal plan of the first year, and the budget plan is now related with some privatizations that the government hopes to realize in the next months.
The Prime Minister himself announced that the final decision for intervening in the budget or not will be taken in September, when the government will hold the sale auction for the four hydropower plants and the Albpetrol Company, the revenues of which would facilitate the budget temporarily.
The postponement of the public finances, which started in 2009, when the economy faced the first crisis effects, now has changed the scheme for using the privatization revenues. Different to some years ago, when they were used for increasing the public investments and for decreasing the government’s debt, every revenue that is taken from the public assets are being used for compensating the unrealized difference of tax collection and for keeping the budget deficit under control.
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