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The organizing group of the arms business in Gërdec is about to sink, the
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BREAKING NEWS

Daut Gumeni: This is why the socialists and Gentiana Sula blocked the opening of Ilir Metaj's spy file, we expect that the "syringe with sea water" that the DASH senior official injected into SPAK prosecutors will lead to the arrest of "heavyweights"

Daut Gumeni: This is why the socialists and Gentiana Sula blocked the opening of
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BREAKING NEWS

The scandal erupts, the Parliament of Albania is accused of voting without a quorum on the Law on Strategic Investments, this is how the Constitution was overturned by the majority, the fraud is revealed

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BREAKING NEWS

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The dubious wealth of the "sheikh" of the Assembly Laert Duraj who
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BREAKING NEWS

Here are the deals of the SP and Reestablishment, how they are defending the corruption of Klodian Allajbeu and Vilma Nushi, thefts with "Hemodialysis", "Check Up", "Laboratories" and "Sterilization" are proven, arrests are expected from SPAK

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BREAKING NEWS

Rama-Berisha set up a commission to destroy SPAK and the Justice Reform, here are the new "non-women" deals with the prime minister to block arrests

Rama-Berisha set up a commission to destroy SPAK and the Justice Reform, here
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BREAKING NEWS

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BREAKING NEWS

The well-known journalist warns of sensational arrests in the coming days, here are some of the "scorching" files that SPAK is investigating and the scheme followed by BKH agents to arrest Jorgo Goro, the acting mayor of Himara was intercepted for 4 mo...

The well-known journalist warns of sensational arrests in the coming days, here
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Ekonomia

MFE report, here are the factors that influenced the growth of public debt, foreign investment falls significantly

MFE report, here are the factors that influenced the growth of public debt,

Shrinking foreign investment, declining export earnings and fiscal problems are the main factors driving public debt to record levels. During 2020 the debt went to 77.9 percent and according to the data of the report published by the Ministry of Finance more than 66 percent was taken to cover the lost investments. Specifically, during 2020 foreign investment has shrunk by 4.6 percent, a significant decrease compared to a year ago. Although in their recommendations international organizations have repeatedly asked the Albanian government to create reforms to absorb as much foreign investment as possible, because they help economic sustainability, this has not been possible due to the crisis brought by the pandemic. all over the globe. In these conditions, those few absorbed investments could not contribute to the reduction of public debt. "The stock of foreign direct investment - intercompany loans decreased by 4.6% in annual terms, reflecting the poor performance of Foreign Direct Investment during the first half of 2020. The stock is estimated at 12.4% of the total, with a decrease 0.7 percentage points compared to a year ago. The FDI stock accounts for 18.3% of the total external debt stock with a decrease of 21% in annual terms ", the report states. As noted above, most borrowing has been driven by rising costs of making investments that could not be financed by foreign investors. Given that the state budget was not enough to cover all of the investments required by the country due to the coronavirus, the government was forced to borrow several times. In the breakdown by instruments used, the largest share of the total external debt stock is occupied by investments in the form of other investments, with about 66.9% of the total (45.5% of nominal GDP) at the end of the first half of the year. 2020. This ratio is 1.8 percentage points higher compared to a year ago. Within this item, the main weight is occupied by long-term and short-term loans ", explains MFE.

Fiscal and export weaknesses

Despite the fact that the export sector was the most contributing to the economy during the pandemic, their situation was not fully in shape, because exports with Italy as the main market were weak. According to the report, the decline in export earnings has greatly affected the increase in the level of debt. MFE shows that the debt increased by 41 percent only due to the decline in exports and the weakening of the accommodation opportunity for tourists during 2020. “Increasing pressures are also observed in terms of net external debt. The ratio of stock to exports of goods and services expanded 41.2% at the end of the first half of 2020, from 36.0% at the end of the first quarter of the year. These developments are entirely related to the decline in exports of goods and services at a time when the ratio of net debt stock to GDP has decreased by 2. "7 percentage points compared to a year ago", the report shows. A similar picture is given in the case of debt-to-fiscal revenue indicators. According to the report, debt growth due to poor performance in revenue collection is another negative instrument. Fiscal gaps have affected both external and domestic debt, even at higher levels than any other indicator. The ratio of gross external debt to fiscal revenues jumped to 249.5% from 220.2% at the end of the first quarter of 2020 and 226.4% in the second quarter of 2019. Also, the ratio of "general government" stock to revenues fiscal has increased to 124.8%, from 101.1% at the end of the first quarter of 2020 and 103.0% at the end of the second quarter of 2019 ", the report states.