This year’s public debt higher than four years ago
This year’s public debt for Albania based on the projections of the International Monetary Fund (IMF) will be higher than the one four years ago. In 2013, the country’s public debt accounted for 70.4% of Gross Domestic Product, while this year, according to IMF, public debt will account for 71.5%. This indicates an increasing trend of public debt from one year to another, although this year public debt has seen a decline. So, according to the figures provided by the International Monetary Fund on Albania concerning its public debt, in 2014 it accounted for 72% of GDP; in 2015 it accounted for 74% of GDP, while in 2016, it accounts for 73,3% of GDP. However, this year debt has registered a decrease and according to the projection made by the IMF, it will account for 71.5% of GDP.
In this context, the leading international financial institution says that public debt has not performed well from one year to another and that this should require authorities to better manage it in order to reduce it progressively in the years to come.
“PPPs based on the best international practices”
As it was the case several weeks ago, experts of the International Monetary Fund have once again asked Albanian authorities to apply the best international practices for the Public Private Partnership (PPP) concessions. They have also stressed the need to minimize arrears and the improvement of the mechanism for the refund of Value Added Tax. “It’s of a crucial importance that the Ministry of Finance uses its legal powers, which have recently been extended, to assess and monitor PPP projects”, IMF previously declared on PPPs.
No preferential tax policies, caution with new ones
While demanding the government to be clearer in its plans to reduce public debt, the International Monetary Fund has also noted that it should not reduce taxes and it should not apply preferential tax policies. On the other hand, the IMF highlights the fact that energy reforms have slowed down. Another element where the leading international institution has pointed out relates to the process of the consolidation of the banking system, for which it has requested “applicants for new banking licenses to have adequate banking experience and avoid conflict of interest”. “The medium-term opinion remains favorable. Gross Domestic Product is expected to grow by around 4%”, the IMF also declares in its statement on Albania.
“Economic growth is projected at 4%”
“Economic growth is expected to grow by around 4%”. This is the projection made by the International Monetary Fund on Albania for next year. “Inflation is expected to be in line with the 3% target”, is another projection made by IMF concerning Albania’s macro-economic indicators. Furthermore, the Board of Directors says that “the growing economy and the clear electoral mandate obtained by the government are a very good opportunity to continue its efforts to boost Albania’s growth potential, to make the economy more elastic and more competitive and to strengthen the financial system by preserving tax discipline”. In the end, the IMF says that there’s a need for higher revenues, by stopping tax cuts.