The public debt which had been forecast to be lowered to 54 percent by 2013 is expected to lower to only 58 percent of the GDP by 2014
TIRANA, Aug. 16 – Forced budget cuts last July obliged the government to make changes to the macroeconomic framework reviewing the GDP growth rate and public debts levels.
Under the review which was made soon after the budget cuts in mid-July, the Albanian government expects the country’s economy to grow between 5 to 5.2 percent from 2011 to 2014 down from 6.2 percent in the report approved earlier this year.
However, what’s more concerning is that the public debt which had been forecast to be lowered to 54 percent by 2013 is now expected to lower to only 58 percent of the GDP by 2014 under the new 2012-2014 macroeconomic framework.
The public debt, currently at the threshold of 60 percent of the GDP, is expected to remain at 59.4 percent in 2012 before continuing its slow downward trend to 59.2 percent in 2012, 58.6 percent in 2013 and 58 percent in 2014.
The budget deficit in 2011 is expected to be at 3.5 percent and 3 percent in the next three years.
The Albanian government expects inflation to be at 3.5 percent in 2011 and at 3 percent from 2012 to 2014– remaining within the central bank’s target band.
The GDP per capita is expected to grow from Euro 2,959 in 2011 to Euro 3,561 in 2014.
The government also expects the unemployment rate to drop from 13.3 percent in 2010 to 12.7 percent in 2011 and 9.3 percent in 2014.
The high public debt levels and rising budget deficit remain key risks to the Albanian economy, the International Monetary Fund said after concluding a visit to Albania. “The important thing is that the public debt should not reach the maximum 60 percent level. For developing countries such as Albania this is a very high level which should drop,” said IMF’s Gerwin Bell.
The IMF lowered its 2011 GDP growth for Albania to 2.7 percent, down from 3.4 percent earlier this year.
