Albania Public Finance Review : Part 1. Toward a Sustainable Fiscal Policy for Growth

World Bank

Albania Public Finance Review : Part 1. Toward a Sustainable Fiscal Policy for Growth

2014

World Bank

Albania's rapid growth in the decade up to the 2008 global financial crisis propelled it to middle-income status and helped to reduce poverty. The global financial crisis in 2008 slammed the brakes on Albania's largely domestic-demand-driven growth. The government has accumulated sizable arrears in payments for public works and value-added tax (VAT) refunds. In a baseline scenario of no policy reforms, Albania's public debt-to-gross domestic product (GDP) ratio is projected to reach 73.5 percent in 2015 and stay above 72 percent over the medium term. Empirical evidence confirms that high public debt depresses economic activity and significantly increases the probability of default. This report examines closely the opportunities for fiscal consolidation on both the revenue and expenditure sides. Combined effect of structural reforms will reduce Albania's public debt to GDP ratio significantly over the medium term. It can in parallel rebalance its capital spending, particularly in transport, toward maintenance to support growth. Albania needs to strengthen its institutions to reinforce financial discipline and strengthen fiscal policy. Institutional reforms are particularly needed with regard to public financial management (PFM) and introducing a fiscal rule to anchor policy over the medium term.

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accounting bank loans cash flow central government civil service commercial banks economic development economic recovery equipment exchange rate expenditure external debt fraud gross domestic product growth rate health insurance human capital income tax inflation insurance liquidity living standards local government market structure maturity national income pension pensions poverty reduction private investment private sector property rights public debt public expenditure public finance public investment public works remittances returns risk management rule of law sanitation social insurance telecommunications

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Washington, DC

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Central government debt; Financial stability; Domestic market; Capital investments; Bank borrowing; Financial system; Tax evasion; Loan quality; Fiscal policy; Export growth; Real interest rate; Financial accountability; Risk sharing; Interest expenditures; Deposits; International development; Fixed interest; Ministry of finance; Productive investments; Debt crisis; Article; National strategy; Public sector debt; Public sector deficit; Structural reforms; Fiscal deficit; Debt reduction; Variable interest rates; Implicit subsidies; Baseline projections; Interest rate risks; Amortization; Fiscal sustainability; Capital spending; Eurobond; Bank loan; Arrears; Public borrowing; Interest costs; Financial crisis; Local currency; Interest rate differential; Central bank; Credit growth; Fiscal balance; Inflation rate; Macroeconomic crisis; Debt levels; Regulatory authority; Capitalization; Baseline scenario; Financial assets; Banking system; Budget planning; Commodity prices; Debt ratios; Private creditors; Portfolio; Contingent liability; Health ministry; Equipments; Government revenue; Public finances; Tax base; Investment bank; Financial risks; Interest expenditure; Private investors; Banking sector; Currency; Government spending; Re-capitalization; Real growth; Pension reforms; Capital expenditure; Treasury; Interest payments; Fiscal data; Debt crises; Export share; Fiduciary assessment; Financing requirements; Market confidence; Sustainable fiscal policy; Pension reform; Fiscal consolidation; Loan guarantees; Tax policy; Debts; Finance ministry; Monetary fund; Financial flows; Enterprise performance; Output losses; Sovereign debt; Net present value; Civil service law; Road network; Currency depreciation; Debt sustainability; Government guarantees; Financial management; Organic budget law; Expenditures; Domestic debt; Investment climate; Fiscal impact; Debt dynamics; Short-term debt; Current account deficit; Non-performing loans; Floating rates; Interest rate risk; Exporter; Foreign currency debt; Borrower; Tax revenues; Government paper; Consumer goods; Government support; Government finance statistics; Cash management; Debt stock; Export competitiveness; Budget plan; Emerging market; Financial control; Tax rate; Deficits; Corporate income tax; External borrowing; Contingent liabilities; Government supports; Debt burden; Emerging markets; Interest cost; Budgeting; Corporate tax rates; Personal income tax; Exchange rates; T-bills; Fiscal deficits; Credit rating; Asset management; Real interest; Total tax revenue; Collateral; Income taxes; Durable; Personal income; Borrowing costs; Capital investment; Government finance; Debt level; Credit lines; Foreign direct investment; Market conditions; Pension rights; Pension system; Tax administration; Foreign currency; Import costs; Treasury system; Commercial loans; Fixed interest rates; Land value; Debt management; Zero coupon; Public spending; Opportunities for corruption; Debt ratio; Holding; Bonds; Investing; Public financial management; Nonperforming loans; Government budget; Probability of default; Tax collection; Debt defaults

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CC BY 3.0 IGO, http://creativecommons.org/licenses/by/3.0/igo/

En AGRIS desde: 2024-10-18

Fecha de modificación: 2025-10-25

Formato: Dublin Core

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DOI http://documents.worldbank.org/curated/en/2014/01/19230254/albania-public-finance-review https://hdl.handle.net/10986/17279

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Albania Public Finance Review : Part 1. Toward a Sustainable Fiscal Policy for Growth

2014

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