Albania public debt hits new high

Albania’s public debt has reached 54 percent of GDP in 2007.

Izvor: BIRN

Friday, 19.10.2007.

11:30

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Albania’s public debt has reached 54 percent of GDP in 2007. The figure is just 6 per cent short of the barrier allowed by the EU for countries in the Eurozone - which Tirana aspires to join one day. Albania public debt hits new high The level of debt this year reached 540 billion leks (EUR 4.4bn), or 150,000 leks (EUR 1,225) per capita. However, the government says it is not worried about increased debt, as long as Albania continues to attract foreign direct investment. “Theoretically Albania can increase the amount it borrows, if it secures investments. That’s the golden rule that every government follows,” said Sherefedin Shehu, the deputy Minister of Finance. According to government projections, the level of debt for 2008 will reach 576 billion leks ((EUR 4.7bn). However, the ministry of finance says that the level of indebtedness will be reduced because of the expected higher rate of GDP growth. “In total we have a goal to reduce the public debt in relation to GDP. That is necessary to create enough [borrowing] space so the finances don’t come under pressure,” explained Shehu. The government strategy also aims to lengthen the timescale for repaying debt, thereby lowering what it has to pay each year in servicing its obligations. In 2008 Albania will pay 20 billion leks (EUR 163mn) in interest on outstanding loans.

Albania public debt hits new high

The level of debt this year reached 540 billion leks (EUR 4.4bn), or 150,000 leks (EUR 1,225) per capita.

However, the government says it is not worried about increased debt, as long as Albania continues to attract foreign direct investment.

“Theoretically Albania can increase the amount it borrows, if it secures investments. That’s the golden rule that every government follows,” said Sherefedin Shehu, the deputy Minister of Finance.

According to government projections, the level of debt for 2008 will reach 576 billion leks ((EUR 4.7bn).

However, the ministry of finance says that the level of indebtedness will be reduced because of the expected higher rate of GDP growth.

“In total we have a goal to reduce the public debt in relation to GDP. That is necessary to create enough [borrowing] space so the finances don’t come under pressure,” explained Shehu.

The government strategy also aims to lengthen the timescale for repaying debt, thereby lowering what it has to pay each year in servicing its obligations.

In 2008 Albania will pay 20 billion leks (EUR 163mn) in interest on outstanding loans.

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