TIRANA, Feb.27- The interest rates that the government will pay for its public debt are expected to rise significantly in the next four years. According to the estimations done by the Finance Ministry the service cost of the governmental debt will double until 2011. hence after four years the government will need to pay out around $ 500 million as debt interests, out of 250 that it is paying now. The interests on foreign debt are expected to rise even more sharply, by an approximate rate of 3.5 times going from the current annual expense of 2.02 billion lek to 7.2 billion. With the actual exchange rate, every Albanian will pay in the form of taxes around $160 per year only to liquidate the debt when it now pays only $100.
Commercial loans
Albania has sought more debt in the international market and is supposed to have loans around 400 million euro. The finance Ministry says that foreign currency debt has lower cost for the government. Since Albania is no longer qualified as a poor country but as a country in development, it can no longer benefit form soft loan terms. Hence besides public debt taken from internal sources, another way is to use commercial loans form foreign institutions. In May of this year the government has planned to issue bonds worth 200 million euro in foreign exchange with a maturity term of ten years.
Total Debt
Up to the end of 2006 the foreign debt of Albania had reached $ 1.8 billion while in 2008 the new figure will be $ 2.7 billion and every Albanian will pay $ 900 for its liquidation. This is equal to three years of our exports and the situation of the current balance does not favor the Albanian side. The increase in foreign debt has started again a debate between the administration and the IMF, which has insisted on the categorization of internal debt in foreign currency as external debt.
