Public finance crisis

“We’re in a time where there are less incomes and more spending, but not spending for investments that reflect development. We have an increase of the current spending which are mainly wages, pensions and debt interest rate. This situation leaves room for reflection over the deficit phenomenon and current income. We have a debt to pay and these are the spending for consumption, wages, pension and interest rate”, Meksi declared.

In the past three times of this year, the budget deficit was 640 million ALL higher than the public investments. The argument by the Prime Minister, that the Albanian government takes loans only for investments, now is over. Facing this difficult situation with the public finances, the government has decreased a series of taxes that have shrank the budget incomes with other 17 billion ALL.

Mrs.Meksi, former Minister of Economy, says that this is very dangerous.

“It is impossible to increase the welfare without increasing incomes, salaries and pensions, and it is even more impossible to increase the possibilities to pay the debts that have been taken. I want to underline that the precedent of decreasing the debt ceiling has brought a dangerous situation for the economy, with the debt increasing beyond any limit”, Meksi declared.

The public finance crisis reflects a decrease in consumption, but also in public and private investments. Meksi says that the perspective is not optimistic when for the first time after many years, the economy is facing a decreased bank credit.

“Failing to lend to the derivate and the decreased public investments through the state budget will create a contracted economic panorama that even today works below-capacity. But in the conditions when these generators are not there, make the situation even more pessimistic”, Meksi declared.

The Albanian economy marked the lowest growth last year since 1997, with only 1.6%. The International Monetary Fund and World Bank warnings are on the same levels.

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