Albania’s public debt was reduced for the first time since 2013 under 70% of the GDP, assisted by the economic growth and a stronger position of the Albanian LEK towards Euro and US Dollar.
Official data from the Ministry of Finances show that the debt has been reduced to 69.9% of the GDP, from 72.3% that it was in December 2016.
However, the debt remains at high levels. The IMF, World Bank and other institutions consider it as the main risk for financial stability, and also for the country’s economic growth.
Albania’s national debt increased by 1.6 billion EUR during 2012-2015 reaching a record-breaking level of 73% of the GDP.
The opposition accused the government of financial irresponsibility, but the latter said that the debt was increased by the hidden debts left by the previous government.
Two years ago, proposed by the Ministry of Finances, the Parliament approved a law which forces the government to reduce the debt year after year.
According to the macroeconomic program, the government is committed to reducing the debt under 60% in 2021, for the next elections. However, the reduction trajectory has caused debates between the government and the IMF.
The IMF demanded a quicker debt reduction, especially during the first years of the government mandate.
IMF fears that the government will not respect the plan before the elections, as it has happened many times in electoral years.
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