TIRANA, Sep 16؆inance Minister, Ridvan Bode, declared in front of the Albanian Parliament that the new four year plan drafted by his institution will make possible that Albania will soon return to experience 6% GDP growth per year.
According to Bode, the new plan aims to lower budget deficit by 3% and public debt by 50%. In order to achieve such objectives the government promises an improved debt management, but without affecting the growth rate of investments.
The government plans to increase expenditures to 30% of the country’s GDP, but without touching the balance of the fiscal system. Regarding taxes, Bode promised to lower the Value Added Tax (VAT) in education and health care.
Another ambition of the government is also to lower unemployment to 11% at the end of the four year mandate.
Despite Bode’s optimism, the government is going to face a lost of financial restrains at least in its first year. Remmitances from abroad have already recorded a 6.1% decrease in the first half of 2009. Official statistical data report that tax administration is 1.3% short of its planned tax revenues during the first 8 months of the year, or about 15 million dollars. August recorded a historical low with tax revenues falling 15% short of the plan, or about 23 million dollars, which seems to confirm experts’ expectations for a second wave of the crisis to hit Albania’s economy.
In addition Lek the local currency lost more ground to the euro, also reaching another historical low, indicating a serious inflation threat in the months to come.
One cannot but raise an eye brow and wonder how Bode will manage his plan when his government’s income is falling to bits
