IMF-Cani: Finances, in a bad situation

“The only solution left by this government is breaking the deficit of the public debt limit, since all the money is spent in the first eight months of the year. The additional debt that we need for 2013 is at least 24 billion ALL. The expected public debt will not be 64% of the Gross Domestic Product, as the former government had promised, but something around 67%”, Cani declared.

But the crisis is even deeper. The government and the International Monetary Fund calculate that besides the official debt, the Albanian state owes 50 billion ALL to private firms.

“If we include the delayed payments, the debt goes beyond 70%. This is a situation with deep macro-economic disbalances in a time when the economic environment is weak”, the International Monetary Fund representative declared.

The financial crisis is made even worse by the strong economic slowdown. For this year, the Ministry of Finances and the International Monetary Fund calculate that the Gross Domestic Product will increase with 1.7-1.9%.

“We expect the growth to be better in the next year. 2-2.3%, but this will also depend too much on the government’s actions”, added Nadeem Ilahi, Head of the International Monetary Fund.

The debt in critical levels and the inability to soften it through an economic growth, according to the International Monetary Fund, imposes painful measures to Albania.

“It is clear that a sensible fiscal regulation is needed, and this requires a revenue growth from taxes. We have discussed different options with the government, of how these revenues can grow even further, and which taxes should change. We took all taxes one by one to see what we can do with the norms of each tax, and what impact they have in the revenues. Whatever we will recommend, it will be up to the Minister to say what his preferred tax is”, Ilahi declared.

“Certainly, we are the ones who will decide for those taxes, and this is not a matter that can be decided today, because these taxes, as I said, will be part of the budget 2014, and we will try to find the best”, Cani declared.

Bringing the debt back under control will require sacrifices even for spending, especially for the pension scheme.

“We have not decided yet. It is an open option, but if I would speak as an economist, I would ask if it includes reforms of pension scheme, or something else. I believe that it will include even something else”, Cani declared.

“The government is determined and clear for the ambitious measures, the fiscal ones and the structural reforms that we must undertake in the next three years for our common goal, the economic growth”, declared Ahmetaj, Minister of Economic Development, Trade and Enterprise.

 Regardless of the critical situation, both ministers, Cani and Ahmetaj, declared that the government will stay loyal to the electoral promises.

Mr.Cani declared that the main priority remains that of paying the due obligations, for which he didn’t exclude a loan from the International Monetary Fund or the World Bank.

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