TIRANA, Aug. 12 – Along with revising downward mid-term growth and public debt, the Albanian government has also cut public investments for the next four years.
In its mid-term review of the macroeconomic and fiscal framework, approved a couple of weeks ago along with a mid-year budget cut for 2015 due to underperforming revenues, government revised downward public investments for the 2015-2018 period to 4.1 to 4.4 percent of the GDP per year, down from an initial 4.5 to 5.6 percent of the GDP in its initial mid-term program approved in early 2015.
Public investments for 2015 have been cut by 4.77 billion lek (€33.6 mln) to 63.2 billion lek (€445 mln) after the 2015 budget was cut by €114.6 million to 456.4 billion lek (€3.2 billion).
The cut in public investments is more drastic for 2016 when government plans to invest almost the same €445 million compared to 72.1 billion lek (€508 mln) under the initial program.
For 2017 and 2018 public investments are scheduled at 69.3 billion lek (€508 mln) and 76 billion lek (€536 mln) respectively compared to 91.2 billion lek (€643 mln) and 102.8 billion lek (€724 mln) under the initial program.
The Albanian government has revised downward its GDP growth expectations for the next four years and reviewed the cut of the public debt, currently hovering at a record of around 72 percent of the GDP.
In its 2016-2018 revised macroeconomic and fiscal framework approved in late July, the Albanian government expects the country’s economy to grow by 2.7 percent in 2015, down from an initial 3 percent and has also revised downward GDP forecast for 2016 to 3.4 percent, compared to 4 percent for 2017 and 4.3 percent for 2018.
Under the previous mid-term forecast approved last January, the government expected the country’s economy to accelerate from 3 percent in 2015 to 4 percent in 2016 and 4.5 percent in 2017 and 2018.
The public debt reduction has also been revised and is expected to slightly increase to 72.2 percent of the GDP in 2015, up from 71.6 percent in 2014 before embarking on a downward trend of 71.3 percent in 2016, 69.2 percent in 2017 and 65.8 percent in 2018.
The budget deficit for 2015 has almost remained unchanged at 4 percent of the GDP and is expected to drop to 2.8 percent of the GDP in 2016.
The Albanian economy will be affected by international developments especially its top trading partners Italy and Greece, mainly through exports to them, remittances and foreign direct investment, says the government in its report.
