Domestic government borrowing will increase slightly in the first quarter of 2026

2025-12-22 13:00:00, Ekonomi CNA

Domestic government borrowing will increase slightly in the first quarter of

The Albanian government's borrowing in the domestic financial market will increase slightly in the first quarter of 2025.

According to the Ministry of Finance's issuance calendar, planned borrowing will be worth 134 billion lek, an increase of 1.1% compared to the same period a year ago.

For the most part, government borrowing in the domestic financial market consists of the renewal or refinancing of matured instruments. Refinancing of existing debt tends to be done mainly through treasury bills, while covering the newly created deficit is intended to be done through bonds.

The Ministry of Finance has planned the first issuance of 2.5-year bonds in January and February.

But, the first quarter of 2026 is expected to offer new investment opportunities for investors interested in long-term instruments.

The fifth auction for the issuance of 20-year bonds will take place in January, while it will be reopened in March. The 20-year bonds are the longest-term debt instruments ever issued by the Albanian government. They were first issued in 2025.

These instruments are a good alternative, especially for institutional investors. Especially for companies that manage funds with a long-term horizon, such as private pension funds, 20-year bonds create opportunities to enrich the spectrum of securities in their portfolios and increase investment returns for members.

A new auction of 10-year bonds will also take place in January, while its reopening will take place in March. Meanwhile, the auction of 15-year bonds will take place in February.

Typically, the first quarter of the year is the period with the highest concentration of Albanian government borrowing. This is mainly due to a greater tendency of investors, mainly commercial banks, to pursue annual budget objectives in the first half of the year.

But, on the other hand, the majority of budget expenditures are realized in the last months of the year, especially in the part related to public investments. Borrowing in advance and creating large liquidity surpluses creates increased costs for debt interest.

Although borrowing in the first quarter is expected to increase slightly, overall for 2026 it is projected to have a lower value compared to a year earlier.

According to the 2025 budget, the total value of new borrowing foreseen to be financed in the domestic market is 45 billion lek, a value 10% lower compared to that foreseen in the 2025 budget./ Monitor