Finance Ministry show the budget deficit in the first couple of months of this year registered 1.7 billion lek (Euro 11.7 million), down from 9.5 billion lek (Euro 66 million) during the same period in 2013, which a record low for the first two months in the past eight year
TIRANA, March 24 – Albania’s budget deficit dropped to a record low for the first two months of 2014 on lower government spending and a sharp drop in public investments. Data published by the Finance Ministry show the budget deficit in the first couple of months of this year registered 1.7 billion lek (Euro 11.7 million), down from 9.5 billion lek (Euro 66 million) during the same period in 2013, which a record low for the first two months in the past eight years.
The recovery in the budget deficit was a result of government revenue rising by 4.9 percent, spending dropping by 9 percent and public investments dropping by a sharp 72 percent compared to 2013, registering the lowest level since 2008 just before the onset of the global economic crisis.
The boost in government revenue was a result of 17.6 percent increase in the value added tax, which accounts for around a third of total government revenue.
Meanwhile, excise taxes dropped by around 22 percent in the first couple of months affected by the boom in imports of fuel and tobacco in December 2013 ahead of tax hikes applied under a new fiscal package.
The deficit in the pension scheme rose to 5.9 billion lek (Euro 41.3 million), up from 4.8 billion lek in the first two months of 2013, unveiling the need for an emergency reform in the pension system.
Government spending on interest rates dropped by 0.9 percent to 7.8 billion lek (Euro 54.6 million) despite public debt having climbed to around 70 percent of the GDP. The situation is a result of a cut in domestic debt service, whose yields have almost halved compared to early 2013 on consecutive cuts to the key interest rate.
