The Bank of Albania (BoA) has expressed concern about the government forecast in the 2021 draft budget of tax revenues, public-private partnership (PPP) investments, and high public debt.
First Deputy Governor Luljeta Minxhozi stated before the Parliamentary Committee on Economy on Monday that their revenue forecast is lower than that by the government:
“Our revenue forecasts are slightly lower than the budget forecasts,” she stated, adding that uncertainty about the future and other risks may bring about “negative surprises” in revenue collection.
The BoA has recommended to the government to carefully align expenditures planned in the draft budget with the pace of the tax revenue collection.
“The Bank of Albania deems that the realization of the planned expenditures should be careful, and it should follow the timing and rhythm of the level of realization of revenues,” they stated.
The government revenue forecast for 2021 also exceeds the International Monetary Fund’s forecast – 28.5 percent vs. 26.7 percent of the GDP.
The BoA stressed that it is necessary to set a limit in payments to concession holders in terms of GDP percentage, instead of the 5 percent limit over total tax revenue set in the budget law.
It added that regarding future PPPs, the government should prioritize public investments.
The bank highlighted their assessment that despite government plans to lower the public debt during 2021, it still remains high.
“The 2021 draft budget forecasts a reduction of about two percentage points of the ratio of public debt to GDP; to bring it down to around 78.6 percent at the end of 2021. In a longer term, the Bank of Albania draws attention to the fact that this level of debt remains high.”