BoA: The increase in budget revenues is mainly coming from the increase in salaries

2025-11-17 07:17:07, Ekonomi CNA

BoA: The increase in budget revenues is mainly coming from the increase in

The increase in budget revenues this year is overwhelmingly based on wage increases.

In the analysis of fiscal indicators for the first nine months of the year, the Bank of Albania notes that the structure of revenue growth has not shown major changes throughout the year and that their growth has been based to the greatest extent (around 82%) on social security revenues and the expansion of personal income tax revenues. According to the Central Bank, the high growth rates of the latter mainly reflect the increase in wages in the public and private sectors.

At the end of the first nine months of the year, revenues reached a level of 562.5 billion lek, about 6.4% higher than the same period a year earlier.

Meanwhile, the level of expenditures resulted in about 515.5 billion lek, or about 12.2% higher than the same period a year earlier. Despite the slowdown in the third quarter, the profile of expenditure growth did not undergo substantial changes throughout the year. One third of the increase in expenditure came from social security expenditures, due to the high share of the pension scheme in total budget expenditures. Other items with a stable contribution to the increase in the total were personnel expenditures, as a result of the government's policy to increase salaries in the public sector, expenditures for local government and those for investments.

Data shows that this year too, the budget remains in a large surplus. At the end of the 9-month period, the budget balance was positive, at around 47 billion lek, or around 2.4% of GDP. In the third quarter too, the budget resulted in a surplus, at around 14 billion lek.

However, for the 9-month period, the surplus is lower compared to the values ??recorded in the same period a year ago.

Despite the surplus, the government has continued with the annual borrowing program at the projected pace.

For the first nine months of the year, domestic borrowing increased by 26.4 billion lekë, under the spirit of a strategy to reduce borrowing in short-term instruments, against the increase in long-term ones. In terms of actors, the structure of domestic financing remained almost similar throughout the year, with the banking sector bearing the main weight, with about 70%.

Meanwhile, for the first nine months of the year, net borrowing in the foreign market resulted in around 30 billion lek, with the main impact on its increase being the issuance of the Eurobond of 650 million euros in February of this year. The surplus liquidity in foreign currency currently available to the government was used to repay, in October, the remaining 367 million euros of the Eurobond issued in 2018. The accumulation of government liquidity has also been high in the local currency, as a result of the fiscal surpluses recorded throughout the 9-month period./Monitor.al