IMF and SSA report higher debt amount than Ministry of Finance

Tirana Times
By Tirana Times November 10, 2019 10:16

IMF and SSA report higher debt amount than Ministry of Finance

Story Highlights

  • The Albanian government’s credibility to report accurate data on the public debt was lost in 2013, when the political rotation revealed public arrears that had produced a hidden debt amounting to 6 percent of the GDP

Related Articles

TIRANA, Nov. 3 – In its recent World Economic Outlook report, the International Monetary Fund did not acknowledge the official government debt data reported by the Ministry of Finance and Economy in Albania. The IMF reported that the 2018 public debt in Albania amounted to 69.9 percent; this number was 2.8 percent points higher than the 67.1 percentage reported by the government for 2018. The statistics of the IMF correspond with the data in the 2018 budget assessment report by the State Supreme Audit (KLSH), which found that the real government debt was 69.7 percent. 

Both the IMF and KLSH included the government arrears in the public debt accounts, which are currently excluded from the MFE’s reports. This is the third year in a row in which the IMF and the government give different reports on public debt data; during 2017 the Albanian government reported that the public debt composed 70 percent of GDP, while this number was actually 71.8 percent according to the IMF and 72 percent according to the KLSH. The Albanian government’s credibility to report accurate data on the public debt was lost in 2013, when the political rotation revealed public arrears that had produced an undisclosed debt amounting to 6 percent of the GDP. Despite strict and preventative measures to avoid similar outcomes, the situation did not change six years later, as government liabilities reached 519 million euros (including court rulings) according to the KLSH. As a result, the inability to pay off overdue financial obligations undermines the debt stock used to fund undeclared expenses.

According to the KLSH’s report on undeclared government expenses, the amount of the duty on reimbursable VAT and arrears as ascertained by the Compulsory Health Insurance Fund, is around 340 thousand euros.

Considering this amount, the public debt stock would have been around 9.3 million euros instead of the reported 8.9 million euros, which would then indicate the 69.7 percentage level of the debt based on the debt-to-GDP ratio. If the effect of the exchange rate depreciation on the external public debt is excluded, the real debt amounts to 71.6 percent of the GDP, or 4.4 percentage points more than the amount reported by the Ministry of Finance and Economy, according to the KLSH.

 

Tirana Times
By Tirana Times November 10, 2019 10:16