The government's internal borrowing will remain at the level of 50 billion lek for 2025 as well

2024-11-06 14:25:00, Ekonomi CNA

The government's internal borrowing will remain at the level of 50 billion

The Albanian government plans to keep borrowing in the internal financial market at approximate values ??for the next year as well. According to the draft budget of 2025, the total value of the new borrowing foreseen to be financed in the domestic market is 50 billion ALL, the same value as that foreseen in this year's budget.

According to data from the Ministry of Finance, net internal borrowing (new issued debt minus matured debt) until the end of the 9th month of this year has reached the value of approximately 37 billion ALL. The entire increase in borrowing was realized in long-term debt instruments (bonds), while short-term debt in treasury bonds has decreased.

In case the borrowing is realized in the estimated values, during the last quarter of the year it is expected to finance the difference of about 13 billion lek in the estimated additional value of internal borrowing. However, by the end of the 9th month, the budget balance was in abundant surplus, which reached the highest historical value, of almost 69 billion ALL. If the expenses will not be fully realized according to the forecasts even for the last quarter of the year, it is not excluded that the deficit and the realized borrowing will be revised down.

For 2025, the government has planned a new exit to the international markets for the issuance of a new Eurobond. According to the draft budget, the value of next year's issue is expected to be approximately 650 million euros. However, this is an indicative value and, depending on market conditions, an issue of even greater value is not excluded.

The new Eurobond is expected to partially serve to refinance the Eurobond issued in 2018 and maturing next year. The Albanian government tried to make a partial buy back of this Eurobond last fall, for an amount of 250 million euros. However, the interest of investors to sell the bond before maturity was not very high and eventually the buyback offer was closed with the repayment of a total amount of 133.3 million euros. The remaining part of the 7-year Eurobond of 2018, of 366.7 million euros, will be refinanced at maturity, in October next year.

In addition to the Eurobond, the government also foresees long-term foreign loans for special projects for approximately 26 billion ALL and loans for budget support from international institutions for approximately 18.5 billion ALL.

However, the vast majority of foreign borrowing next year will serve to pay off existing obligations. Payments of the principal of the external debt are foreseen for a total value of 103 billion ALL.

The net increase in foreign borrowing is expected to be only 8.2 billion lek (about 84 million euros)./ Monitor magazine