TIRANA, May 12 – Government says it has allocated around 14 billion lek (€99 mln) to clear arrears on public works and service to private companies in the first five months of this year.
In a report on the progress of the payment of accumulated unpaid bills, the Finance Ministry says some 14 billion lek has been allocated to clear arrears until May 11, 2015, which is 70 percent of the target it has set for 2015, but only 7.6 billion lek (€53 mln) disbursed.
The ministry says the majority of allocated funds, some 5.6 billion lek (€39.5 mln) went to clear unpaid bills for public investments, compared to 4.5 billion lek (€31.6 mln) in VAT refunds and 3.8 billion lek (€26.5 mln) in court decision, expropriations and payments to people with disability.
The payment of around 34 billion lek (€237 mln) in accumulated unpaid bills to the business community is estimated to have had a positive impact in the liquidity of enterprises engaged in public works in 2014 at a time when lending registered moderate growth rates of 3 percent.
“For 2015, government plans to pay off 20 billion lek (€141 mln) to clear government arrears, compared to 35 billion lek (€247 mln) in 2014,” says the finance ministry.
The government has drafted a strategy which foresees the payment of a total of 72.6 billion lek (€ 500 million) in government arrears over the next three years. The arrears, estimated at 5.3 percent of the GDP include unpaid bills to the business community for finished public works and services, VAT and profit tax refunds as well as bills from court decisions against the Albanian government, expropriations and payment of social assistance to people with disabilities.
In its latest report on Albania, the IMF said addressing the problem of unpaid bills and arrears would enhance the government’s credibility and boost liquidity and confidence. “Clearance of these liabilities would strengthen private sector balance sheets, facilitate the resumption of credit growth by helping lower nonperforming loans (NPLs) and support domestic demand.”
