Albania saw a decline in its
public debt in 2016, for the first time since 2010. Preliminary statistics from
the Ministry of Finance showed Friday that in 2016 the debt was reduced to 71%
of GDP, down from the historical record of 72.7% reported at the end of last
The strategy of public finance
management provided payment of arrears that were accumulated within 2015 and a
gradual reduction of debt levels in 2016 and onwards.
It is expected that this year the public
debt will reach the figure of 69.1% of GDP, while the target is reducing it to
the level of 56% of GDP by 2019
In terms of monetary value, Albania's public
debt at the end of last year was Lek 1 trillion 66 billion, increasing by 2.2%
compared to the end of 2015.
The ratio between debt incurred in the
domestic market and external debt did not undergo any changes, and according to
the figures domestic debt constitutes approximately 52.7% of the stock of debt.
The government has continued this year
to move towards long-term debt, especially with regard to domestic debt.
Long-term debt, with a maturity of over
one year, has reached 57.3% of the total domestic debt, from 53.9% at the end
With this move, the government aims to
reduce the risk of refinancing and to take advantage of the cycle of lower
interest rates in financial markets.
One of the main criticisms than the
opposition has launched is the increase of public debt. These accusations broke
out when Rama came into power and lifted the debt threshold which didn't allow
the government to borrow beyond the level of 60% of GDP.
In contrast to the opposition, Rama said
that not only debt hasn't increased, but it has dropped.
According to him, the public debt in the
third quarter of 2016 dropped under 70% and for the first time in 6 years,
Albania returned to a normal trend and puts its public debt under control.