IBNA Analysis/Novelties of the 2017 budget in Albania

IBNA Analysis/Novelties of the 2017 budget in Albania

The Albanian government has drafted the 2017 budget, which belongs to an electoral year and as it has happened in the past, it couldn’t escape politicization.

The main part of this new budget consists of the decision not to increase taxes and to increase salaries and pensions up to 17%. This is good news for many people ahead of the parliamentary elections, which will decide the fate of the left wing government.

Below, IBNA analyzes the novelties that brings the 2017 state budget, which is expected to be approved within the end of this month.

The current year looks positive for the Albanian economy. The country has seen a 3% economic growth. The government says that this growth is expected to amount to 3,5% until the end of 2016.

These figures make Albania one of the fewest countries in the region with the highest economic growth and a positive trend.

Minister of Finance, Arben Ahmetaj says that the Albanian economy has changed entirely. Meanwhile, he admits the risks and the daily difficulties.

According to Mr. Ahmetaj, in the past three years, the Albanian government has gone through a difficult path with many sacrifices, in order to come out of the crisis, recover the economy, adjust the tax and financial system and undertake deep and difficult structural reforms.

One of the successes that he mentions is that after 4 years, unemployment has gone down under 16%, below the 2013 level. This figure has been issued by INSTAT. However, the opposition talks about a growth of unemployment. Among the general public too there’s a perception that unemployment has reached critical levels.

The Economic Sensitivity Index is another aspect which is seen as positive in Albania. Businesses, taxpayers and consumers seem to have great hopes on the Albanian economy.

Minister Ahmetaj says that the positive sensitivity and growth of consumption come as a result of the reforms taken place in the past three years. “There would not be growth if a government did nothing. In three years, this government has undertaken reforms which European governments or other governments for that matter, have not dared to undertake: energy reform, a domain where the region has many problems; reform in pensions, a domain where the entire world has problems and very few countries have undertaken, reform in education, etc.


In the framework of the 2017 budget, starting on march of next year, Albanians who work in the state administration will see a pay increase.

This takes place for the first time since 2013. This increase is expected to be no less than 10%. Experts say that if the inflation of the four years is taken into account, then this increase is only 2%. This is also confirmed by minister Ahmetaj:

“As far as salaries are concerned, the increase will be 10% on average and for the first time in these 7 or 8 years, there will be a real increase.  The growth we saw from 2009 until 2013 could not catch up with inflation rate. In 2017, we will exceed accumulative inflation of the past four years with +2%, thus having a real growth”.

Mr. Ahmetaj sees another important aspect on the way the money for this pay increase is secured. “The increase of salaries and pensions in previous years has been made through debt. This is the first time that this increase doesn’t incur a new debt. On the contrary, in 2017 we are aiming to decrease public debt by at least 1%”.

Meanwhile, the government says that this year, it has managed to secure 70 million USD in order to pay a part of the state debt.

For nearly ten years, Albania has had the highest debt in the region and the latest figures indicate a good perspective for a gradual reduction of the debt. /balkaneu.com/