Government will increase debt

The strong dropping of revenues and the high spending of the past government have brought the budget indicators outside the legal limits. In the first eight months of the year, revenues from taxes and other sources were 16.3 billion ALL less than the plan, according to the Ministry of Finances.

Experts at the ministry calculate that by the end of the year, the failure to realize the plan might mount up to 35 billion ALL, due to the decreased taxes, the effect of which is being felt in the second semester of this year.

To regulate the out of control finances, the government will bring to parliament a reviewed budget draft. Top Channel has learned that the changes are a combination of cut spending and increased loans. The initial budget draft showed that the government’s loans for this year was predicted at 49 billion ALL, or 3.4% of the Gross Domestic Product. With the new changes it might go to 59 billion ALL, or more than 4% of the Gross Domestic Product.

In the first half of the year, the government encashed 12 billion ALL from selling four hydropower plants to Kurum Company, but the money was used to increase the electoral spending, rather than keeping the budget indicators under control. With the new changes, Albania will violate the budget deficit once again. This situation has increased the public debt each year to levels that according to the International Monetary Fund and the World Bank make it very difficult for the economy.

Top Channel