Public debt reaching critical limit
09/11/2012 00:00
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The public debt reached 59.8% of the GDP in the third trimester of 2012,
according to the government’s data, only 0.2% from the maximal legal
limit.
The Ministry of Finances declared that Albania’s debt reached 8.1 billion USD by the end of September. The data show that the debt keeps growing, despite the austerity policies by cutting investments and other expenses.
The strong slowdown of the economic growth has apparently brought the Albanian economy to the debt trap. Only in the first 9 months of this year the debt increased with 0.45% to the GDP, while compared with 2010, the growth was 1.3% higher.
These are the official data of the government, but the international institutions warn that the real number is much higher. A few days ago, the World Bank declared that the hidden obligations to the private sector could be from 1.5 to 2% of the GDP, which means that the de facto debt has crossed the legal limit of 60% of the GDP.
The Albanian government has tried to reduce the debt cost by changing it to long terms conditions with higher interest rates. This increased the external debt from 1.5 billions USD by the end of 2006 to 3.57 billion USD by the end of 2012. As compared with the GDP, the increase is 10% and for the first time, by the end of September, most of it was a commercial debt.
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