TIRANA, October 30/ATA/ The Albanian government aims to return the level of public debt to the downward trajectory in 2021, reducing it into 78.6% of GDP from about 80.9% expected in 2020.
Minister of Finance and Economy Anila Denaj said during the discussion of public debt indicators in the Parliamentary Committee on Economy and Finance that the objective remains the return of debt to the downward trajectory.
According to the minister, through a more efficient management of the borrowing process, it is possible to reduce the refinancing risk and reduce interest rate risk.
“The increase in the debt stock has come mainly from the measures taken within the management of the situation created by the spread of the Covid-19 pandemic, as well as from issuance of the Eurobond in June 2020”, said Denaj.
In the medium term, long-term instruments will continue to hold the main share in the portfolio, where the external debt in the portfolio currently occupies the share of 48.9%.
Exposure to exchange rate risk has been kept under control, Denaj said, as the stock of government debt in foreign currency continues to be significantly below the strategic and debt sustainability threshold (60%).
While the domestic debt portfolio continues to be concentrated at over 60% in the banking sector, making it sensitive to systemic risks of the banking sector and changes in banks’ investment policies.
Expanding and diversifying the investor base in the domestic market is one of the objectives of public debt management that will enable the reduction of the borrowing exposure to the risks of the banking sector.
By the end of 2020, the level of public debt is projected to reach 80.9% in relation to GDP. Meanwhile, the basic objective for the medium term will be to return to a downward trajectory of public debt starting from 2021.
Referring to the economic growth forecasts, as well as the budget deficit planned for 2021, the level of public debt in relation to GDP is projected to decrease to about 78.6% of GDP, followed by a further decrease during 2023 to 76.3% of GDP , said Denaj./a.gjonaj/ /a.g/p.s./
