Gross external debt rises to Euro 5.3 bln

TIRANA, April 9 – Albania’s total gross external debt stock reached around 5.3 billion Euros at the end of the final quarter of 2012, up 498 million euros year-on-year and 51 million euros compared to the third quarter of the year. Bank of Albania data show general government accounts for 45 percent of the total external debt stock with 2.2 billion euros, all of which is long term. Banks rank second with 1.1 billion euros followed by other sectors with 1 billion euros.
At the end of the final quarter of 2012, external debt stock represented 26.22 percent of the GDP, up from 25.6 percent at the end of 2011 and 17.94 percent at the end of 2008. Albania’s debut sale of 300 million euros of five-year bonds at a yield of 7.5 percent at the end of October 2010 proved successful but Albania withdrew from issuing another Eurobond as the sovereign bond crisis in the Eurozone significantly increased yields.
The Finance Ministry says around 58 percent of Albania’s external debt is in Euro, 30 percent in SDR and ACU and 8 percent in USD. External financing at fixed interest rates accounts for around 74 percent.
External borrowing by the government of Albania consists of multilateral and bilateral official credits, syndicated bank borrowing, and a Eurobond. The most important multilateral creditors to the government are the World Bank, the European Bank for Reconstruction and Development, the European Investment Bank, the Council of Europe Development Bank, and the Islamic Development Bank. The most important bilateral creditors are Germany (through KfW Development Bank), Italy, and Austria.
Estimated at over 900 billion Lek currently, the public debt costs the Albanian government 3.7 percent of the GDP in interest payment annually.
What puts the Albanian public debt more at risk is that it accounts for more than double the annual revenues, while interest expenditure has risen to 3.4 percent of the GDP, compared to an average of 1.3 percent in the SEE region, the IMF has warned.
Finance Ministry data show Albania’s total public debt climbed to around 828 billion lek or 61.51 percent of the GDP at the end of 2012, with domestic debt accounting for 34.94 percent and external debt at 26.57 percent.
Total debt service in 2012 climbed to 52.16 billion lek, up from 48.7 billion lek in 2011, accounting for 3.88 percent of the GDP, up 0.12 percent compared to 2011.