The International Monetary Fund assesses that Albania might cross the
legal limit of the public debt this year. The report after the visit in
Albania says that the 60% debt limit might get crossed within 2012, and
it is expected to remain high in a long term.
IMF says that besides increasing the dangers for Albania, the debt might damage the economic growth by narrowing the loaning possibilities for the private sector, and by paralyzing this way the government in financing indispensable investments.
In this situation, the IMF experts recommend the government to give up from the fiscal stimulus, an increase of expenses for helping the economic growth, since it would not be a solution.
IMF thinks that the best way to support the economy is the fiscal consolidation, which must start by stopping the increasing curve of the public debt right in the next year, when the government will be obliged to keep the same debt level as this year.
According to the IMF, this would be the first measure that should be followed by a series of other reforms for increasing taxes and reducing expenses.
IMF says that the economic growth that is needed for stopping the debt cannot come only by the good administration and could demand the increase of some taxes, including income taxes.
IMF recommends the government to increase wages and pensions only for compensating the inflation.
Another measure that according to the IMF would reduce the public finance danger is that of ending the optimistic budgets, what would avoid the phenomenon of unpaid bills by the government.
Top Channel
