Govt starts drafting 2013 budget

TIRANA, Sept. 17 – While a final decision on the expected cuts for the 2012 budget has not been made yet, the Finance Ministry has already started drafting the 2013 budget. The initial draft budget is expected to be ready in the first two weeks of next October after the conclusion of negotiations with respective beneficiary institutions.
The draft budget is expected to spark harsh debates during its discussion in Parliament considering the initial overoptimistic targets government sets and their review downward in mid-year because of underperforming revenues.
Facing crisis impacts, government has reviewed downward its overoptimistic GDP growth targets and raised public debt expectations to the legal ceiling of 60 percent of the GDP as revenues continue underperforming due to domestic consumption remaining sluggish. In its review to the 2013-2015 macroeconomic framework approved by government on July 1, but published by the Finance Ministry only recently, the 2012 GDP growth forecast has been lowered to 3 percent, down from 4.3 percent in the initial budget and the public debt raised to 59.9 percent of the GDP, only 0.1 percent below the legal threshold. What’s worse government expects public debt will continue remaining at the 59.9 percent levels even for 2013 and 2014.
For 2013 and 2014 government expects the economy to grow by 4 percent and 4.2 percent. respectively which is twice higher compared to what international financial institutions expect.