TIRANA, July 22 – The Albanian government says it has cleared around 13.4 billion lek (€94 million) in accumulated unpaid bills in the first eight months of this year, almost two thirds of what it has scheduled to pay off for this year.
The Finance Ministry said it cleared around 5.3 billion lek (€37.6) in arrears to private companies for public works, another 4.5 billion lek (€31.7 million) in VAT and profit tax refunds, and 3.4 billion lek (€24 million) in judicial, expropriation decisions and payments to people with disabilities.
The payment of around 34 billion lek (€237 million lek) 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 (Euro 141 mln) to clear government arrears, compared to 35 billion lek (Euro 247 mln) in 2014,” says the finance ministry.
In late 2013, the government drafted a strategy which foresees the payment of a total of 72.6 billion lek (Euro 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.”
