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The debt that the government has taken to carry out additional expenses that cannot be covered by budget revenues is estimated to have reached 82.7% of the Gross Domestic Product in the second quarter of 2022, according to the latest report of the European Commission on candidate countries and pre-candidate countries .
This is the highest level in the region, even surpassing Montenegro, which had the highest debt until now.
According to the European Commission report, the stock of public debt rose to 82.7% of GDP, up from 74.9% in the previous quarter and 68.8% of GDP a year ago.
While the Ministry of Finance, in the public debt bulletin, reports the debt level at much lower levels of 69.5% of GDP in the first quarter of 2022, down from 73.1% at the end of 2021.
In the region, Kosovo has the lowest level of public debt, with 20.3% of GDP, Bosnia and Herzegovina (35.4%), North Macedonia (47%), Serbia (56.5%), Mt. ZI (76.6%) .
In 2020, all countries increased their public debt, as governments designed aid packages to support economies that were hit by quarantines to contain the spread of Covid-19. The record was reached by Montenegro, which brought the debt to over 100% of GDP. Albania, although it increased its debt, gave the lowest aid packages at around 1% of GDP, according to estimates by the International Monetary Fund.
Then, with the recovery of the economy, the debt began to decrease in all countries, but in Albania, according to the figures of the European Commission, it turns out that the trend is increasing.
In recent years, the International Monetary Fund has recommended the government to reduce the public debt, focus on making the necessary expenses and direct a part of the income for the protection of the needy classes.
The main risk, according to the IMF, is that if the economy worsens, the deficit and debt would continue to rise and, as a result, the government would not have the money available to reduce the effect on the economy of this shock. Now that inflation threatens to slow the economy, a high debt does not create fiscal space for the government to support the economy and the needy.
According to the Fund, it would be advisable to moderate the overly ambitious public investments financed with domestic resources to protect priority expenditures for social protection, health care (especially vaccination), and earthquake reconstruction as well as to increase contingency./Monitor .co.uk
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