Albanian parliament approves budget while citizens face economic uncertainty
- The Albanian parliament approved the 2025 draft budget with a majority vote.
- The budget allocates 822.7 billion lek in expenditures targeting crucial sectors.
- The government's efforts aim to foster economic growth while maintaining fiscal discipline.
On December 4, 2024, the Assembly in Albania approved a draft budget for the year 2025 with a significant vote of 75 in favor and 24 against, reflecting priorities aimed at promoting sustainable economic growth and fiscal consolidation. The budget plans for a total expense of 822.7 billion lek and an expected revenue of 754.6 billion lek. With a focus on creating employment and improving well-being for all citizens, the government has earmarked substantial funds for various priority sectors, including education, healthcare, agriculture, and infrastructure, alongside the United Nations Growth Plan for the Western Balkans. Key components of the budget include allocating approximately 162 billion lek, equivalent to 6.2% of GDP, to public investments designed to enhance tourism, agriculture, and essential infrastructure. This allocation aims to support both economic development and social improvement, playing a critical role in fulfilling the government's objectives regarding fiscal policy. The budget also highlights fiscal discipline, aiming to achieve a positive primary balance while pursuing a reduction in public debt relative to GDP. For the upcoming year, projections indicate a targeted debt level of 55.8% of GDP, down from the anticipated 56.3% by the end of 2024. The government is prioritizing maintaining a productive ratio between the total net borrowing of the budget and the capital expenditures of the central government as part of its strategic financial management. Furthermore, despite proposing a budget accommodating indexation and bonuses for retirees, there are no provisions for salary increases, indicating a cautious optimism towards economic capacity amid ongoing fiscal consolidation. This budget represents a crucial step for Albania as it aims to accelerate its economic and social convergence with EU standards, addressing challenges while delivering targeted support to essential sectors that will drive forward the nation’s growth in the years to come. The focus on capital investment will be essential for driving innovation and attracting additional resources to support these growth areas, which is imperative in today's competitive global economy.