WB Country Manager urges Albania to tighten fiscal policy
Economy, Top News Friday, January 2nd, 2009
Camille Nuamah
Tirana, Jan. 2, 2008 (AE) – Camille Nuamah, the World Bank Country Manager for Albania, urged the government “to take a very conservative approach to fiscal policy”, as the future is uncertain and the Global Financial Crisis can affect Albanian economy in 2009.
“Because we don’t know how long the crisis will last, it’s important for the country to take a very conservative approach to fiscal policy. We encourage the Government to stick to the targets it has set for the [fiscal] deficit and to continue to explore avenues to finance that deficit. However, if revenues are lower than anticipated — because the slowdown is deeper or longer than we expect – the Government should stand ready to adjust its expenditures in order to achieve its deficit targets and avoid crowding out the private sector”, Mrs Nuamah said in an interview for Top Channel.
Government has already taken several measures to deal with shrinking prices of imported goods, which are an important source of income, by increasing excise duties for oil and other goods and by issuing a 250 million Euro new debt.
Government has little to do to decrease expenditures as 75% of its budged is destined for wages and other current expenditures. The burden of the “Patriotic Highway” that will link Albania with Kosovo, is likely to continue through 2009.
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