TIRANA, Jan. 7 – With public debt hovering at around 70 percent of the GDP and the country’s population slightly declining, the per capita debt, measuring government’s total debt divided by the population, has increased by around 40 percent in the past four years and is expected to further rise in 2015, according to a study.
Data published by Open Data research centre show the per capita debt, used as a measure of the state’s indebtedness, rose to 341,643 lek (Euro 2,395) in 2014 and is projected to rise by another 6.5 percent to 363,750 lek (Euro 2,550) in 2015.
Immigration was one of the major reasons for the decline in Albania’s population between 2001 and 2011 when 481,000 Albanians left the country. The latest census showed Albania’s resident population shrank by 8 percent to 2.82 million people in 2011 compared to a decade ago.
Some 47 percent of Albanian migrants are reported to live in Italy, followed by Greece with 43 percent of Albanian emigrants. The United States follows as a distant third country of destination.
Albania’s total debt stock in 2014 was estimated at 989 billion lek and its population at 2.9 million people.
Meanwhile the cost of debt service, which includes interest payments plus the repayments of principal to creditors, has slightly decreased in the past couple of years, as yields on 12-month T-bills, the key instruments of government’s internal borrowing have suffered a sharp cut due to consecutive cuts to the key interest rate, currently at a historic low of 2.25 percent. The cost of debt per capita was estimated at 14,745 lek (Euro 103) in 2014 and is expected to rise 17,783 lek (Euro 124) in 2015.
At the end of the third quarter of 2014, Albania’s public debt stock climbed to 961.4 billion lek (Euro 6.78 billion) or 67.8 percent of the GDP without including government arrears of around 3 percent of the GDP. Domestic debt accounted for 35.55 percent of the GDP compared to 26.41 percent for external debt.
At around 70 percent of the GDP, Albania has the highest public debt in the region.
Total debt service cost the Albanian government 41.3 billion lek (around Euro 291 million) in the first three quarters of this year, up from 38.6 billion lek (Euro 272 million) during the same period last year, severely affecting public investments which at around 30 billion lek (Euro 210 million) for the first three quarters of 2014, public investments were down by 43 percent compared to the same period last year, hitting a record low since 2007, according to Finance Ministry data.
