Public debt level not problematic, Bode says

TIRANA, June 1 – Finance Minister Ridvan Bode has said that Albania’s current level of public debt, around 60 percent of the GDP, is not problematic. Speaking at a World Bank conference, minister Bode said the public debt was lowering and would not affect the economy.
“We have a public debt of 60 percent but this is not problematic because 2/3 of it is internal debt in the national currency Lek and the remaining 1/3 is external debt in foreign currency,” said Bode assuring that Albania’s cost of public debt was the lowest in the region at 3 percent of the GDP.
“We have decided to lower the country’s public debt to create mid and long-term security for the economy and have stability in the macroeconomic indicators,” added Bode.
Government hopes to cut the public debt to 53 percent of the GDP by 2013, when its four-year term of office expires.
Bode said that starting from this year the public debt would be cut by 3 percent each year in accordance with the Maastricht criteria.
According to the international Monetary Fund, the large decline in revenue and also a major expenditure increase took the budget deficit from 3 percent of GDP in 2007 to 7 percent of GPD in 2009. That was one fact that was driving public debt now up to almost 60 percent of GDP and current accounts balance of up to 15 percent. The IMF has also urged the country to reduce its budget deficit to the prescribed EU limit of three percent of GDP from its current level of seven percent.
The Albanian public debt reached 6.6 billion dollars at the end of 2009 an amount equal to 60 percent of the GDP.
Meanwhile, government plans to raise as much as 400 million euros ($532 million) of bonds in a debut international offering postponed by two years because of the global financial crisis. The Finance Ministry says it watching the financial markets every day and will wait for the appropriate moment to issue the country’s first ever Eurobond.