Albania’s Government Increase Budged Deficit

Tirana, Sept. 4, 2009 (AE) – The government of Albania has decided to increase the budged deficit by 25 billion lek (192 million euro) by using recent privatization proceeds, in order to cover lower tax revenues and higher than projected expenditures.

The government has been under pressure from the Bank of Albania and the international financial institutions that monitor Albania’s economy to deal with the problems created by the international economic crisis.

According to the new budget approved by the right-wing cabinet of Prime Minister Sali Berisha, expenditures will increase to 402 billion lek (3.1 billion euro) while revenues projections  were cut to 327 billion lek (2.5 billion euro).

Early this year, Albania privatized its power distribution company OSSH for 102 million euro and a minority stake of 12.5 percent of the Albanian Mobile Telecommunications, AMC, the country’s biggest mobile operator for 50 million euro.

The government decided to use another 80 million euro of retained revenues from the privatization of the oil refinery ARMO, privatized in the late 2008.

However, not everyone agrees with such fiscal policy, while experts have warned that such move could push the country further in financial strains.

“The deficit increase will negatively affect the economy because the money will be used in non-productive activities”, Gjergj Teneqexhi, a former budget specialist in the Ministry of Finance.

Short URL: http://www.albanianeconomy.com/news/?p=2041

Posted by admin on Sep 4 2009. Filed under Economy, Politics, Top News. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry