Today: Jul 16, 2025

Social protection, public services take 50% of annual budget

2 mins read
13 years ago
Change font size:

TIRANA, July 31 – Social protection and general public services cost the Albanian government half the annual budget, leaving other priority sectors such as health, education and agriculture with a minority share. Finance Ministry data show government spent 107 billion lek on social protection and 78 billion lek on general public services last year, which is 49.3 percent of the total 376 billion lek annual budget.
While social protection covers risks and needs associated with sickness/healthcare, disability, old age, unemployment, housing and social exclusion, ‘general public services’ include expenses related to executive and legislative organs, financial and fiscal affairs, external affairs, foreign economic aid, basic research and expenses related to debt.
‘Economic affairs’ which covers support programmes, subsidies and public infrastructure spending in key sectors cost government 51.3 billion lek or 13.6 percent of its total budget.
Education and health rank the fourth and fifth most costly sectors to the Albanian government with 42 billion lek and 35 billion lek respectively in 2011.
‘Housing and community amenities’ and ‘public order and safety’ cost government 23 billion lek and 21 billion lek respectively in 2011, according to Finance Ministry data.
As a share to GDP social protection accounted for 8.1 percent in 2011, down 0.1 percent compared to 2010. Economic affairs spending also dropped to 3.4 percent, down from 4.3 percent in 2010. Spending on education and health accounted for 2.9 and 2.7 percent respectively in 2011, down from 3.4 percent and 2.6 percent in 2010.
According to the World Bank, Albania’s 8.2 percent of the GDP expenditure on social protection is just below the 10 percent limit which risks investments in other key priority sectors such as education and health. A reform in the pension system where the deficit has been growing in recent years is considered a necessity.
As the pension reform initiated back in 2002 concludes this year with the retirement age having gradually increased to 65 years for men and 60 for women, the number of new pensioners in Albania will double, having extra costs for government to cover the deficit in pension scheme. Finance Ministry data in the 2012 budget report show the deficit in the pension scheme in 2012 will rise to 38.188 billion lek, (USD 380 million)
The deficit in the pension system during the first half of 2012 grew to around 18 billion lek, up from around 16 billion lek a year ago. In the first half of 2012 government collected 24.5 billion in social security contributions and spent around 42.5 billion lek.

Latest from Business & Economy