Bank of Albania warns government on budget deficit

TIRANA, Dec. 3 – Albania’s central bank has warned that the budget deficit is getting deeper, although it still remains within projected targets.
The Bank of Albania recommended this week that the government should give careful oversight to the deficit indicators before the situation gets worse.
“Fiscal policy, during the third quarter of 2009, has shown signs of softening its expansionist character. Revenues have seen a slight increase compared with previous months, while there is a drop in the pace of carrying costs,” the central bank said in its latest report. “In annual terms, during the first nine months of the year, revenues have seen an increase of 6 percent, while budget expenditures by around 22 percent. The budget deficit remains high relative to historical levels, but within the limits of the recently revised budget.”
The bank’s experts say the deficit reflects the high level of public capital expenditures during 2009. Public spending and expansionist fiscal policies also gave their contribution to maintaining a better economic activity during the period of the economic crisis.