Albania last in Europe for fiscal measures to handle Covid impact

Tirana Times
By Tirana Times November 9, 2020 14:19

Albania last in Europe for fiscal measures to handle Covid impact

Albania compared to all the other countries in Europe offered less fiscal measures in the 2020 budget in relation to Gross Domestic Product to cope with the consequences of the pandemic in the economy, according to the International Monetary Fund .

Fiscal support (additional expenditures and deferral of tax payments) was about 1% of the country's GDP, the lowest among developing countries. Albania's fiscal measures have been dominated by the reallocation of budget expenditures.

In developed European countries, fiscal measures averaged 6.2 percent of GDP, while in developing countries these measures were weaker, averaging 3.1% of GDP. In Albania they were even lower, accounting for only 1% of GDP.

The argument that some governments were limited in their maneuvering space since they had to respect debt ceilings does not apply in this case since Albania increased its public debt considerably due to the fact that it also had to finance reconstruction projects post the November 2019 earthquake.

Recently the government has announced wage subsidies to help SMEs to mitigate some Covid effects. Business associations especially from the hard hit sectors of tourism have appealed for stronger support from the public finances.

Tirana Times
By Tirana Times November 9, 2020 14:19