President Ilir Meta Has Reservations About 2020 Budget

President Ilir Meta has decreed, with reservations, the law on the budget of 2020. According to a statement, in order not to impede the implementation of immediate measures related to the repair of damage caused by the 26 November earthquake, he decreed the law without delay.

Despite this, after reviewing the law, Meta said he has identified many problems within it, inter alia the following:

  • Economic growth slowed in 2019 to an average of 2.8%, less than the 3.4% claimed by the Ministry of Finance;
  • The trade balance has deteriorated further during the third quarter of 2019;
  • Net exports provided negative impacts, due to the growing deficit during the second quarter;
  • Total investment continued its downward trend, beginning in the third quarter of 2018, shrinking by 0.9% in the second quarter of this year;
  • Foreign Direct investment has shown a downward trend in the second quarter of 2019;
  • The energy sector has consistently shown financial weaknesses;
  • GDP is expected to decline sharply in the fourth quarter of 2019 due to damage caused by the November earthquake;
  • The dynamics of VAT revenues have further deteriorated in the 11- month period of 2019;
  • The business climate, according to the Doing Business 2020 report has deteriorated and the corruption perception index in the country has increased significantly;
  • Forecasting economic growth at 4.1% for 2020 remains unrealistic because it does not reflect the weaknesses of economic growth for 2019, as well as the added effect of earthquake damages and losses;
  • The reduction of public spending on the education sector as a percentage of GDP has not addressed the continuing concerns over the years raised by educational institutions and students, despite the commitments made;
  • An increased fiscal risk for public expenditure for the 2020 budget year is the increase in the value of existing PPP projects and the number of new projects, the risk of capital injection for the Investment Corporation, the financing of energy sector losses, and increasing the cost of public debt;
  • A potential risk is the increase in the public debt stock itself due to the increase in its cost, as well as the full inclusion in the calculation of arrears to private contractors for works performed, from non-refund of VAT, from credit surplus. from profit tax, domestic and international court decisions, and local government debt.