The fall of the euro/ The government saves 88 million euros in debt repayment by 2024

2024-09-30 16:12:44, Ekonomi CNA

The fall of the euro/ The government saves 88 million euros in debt repayment by

The fall of the euro beyond the government's projections saved the state budget this year about 8.8 billion lek or 88 million euros in the repayment of the foreign debt.

The calculations were made by the Ministry of Finance in the recent changes made to the state budget through a normative act.

In the expected expenses for debt interests during 2024, it is estimated that there will be a saving, in the amount of 2 billion ALL, in external interests, mainly as a result of the effect of the exchange rate, the Ministry of Finance refers.

Also, the item of external debt repayments is revised with a decrease of about 6.8 billion lek, as a result of the effect of the exchange rate, as well as the non-materialization of possible payments, foreseen to be made by the Ministry of Financing for guaranteed loans, payments made by the borrower himself.

As a result of these developments, it is emphasized that the changes proposed in this normative act will continue to guarantee the downward trajectory of the level of public debt, in relation to GDP, in accordance with the respective fiscal rule, defined in the organic law of the budget.

Despite the high level of savings in debt service from the exchange rate and accumulated revenues, the budget deficit remained unchanged at the level of 57.2 billion ALL.

Within the deficit measure there are restructurings. Financing through foreign loans, in the form of budget support, increases by about 3.2 billion ALL, reflecting the expected disbursement of the advance support of the European Union, which will be granted to the countries of the Western Balkans, in the framework of the new economic plan.

Even last year, more than half of the reduction of the public debt during the last year came as a result of the strengthening of the lek in the exchange rate.

The Bank of Albania estimated that the ratio of gross public debt to Gross Domestic Product (GDP) fell to 59.2% at the end of 2023, being about 5.3 percentage points lower than the level estimated at the end of 2022.

According to the Bank of Albania, more than half of this decrease, or 2.7 percentage points, is attributed to the effect of the appreciation of the lek against the euro.

From the beginning of the year until September 4, the euro depreciated against the lek by 3.3 lek, being exchanged at the value of 99.7 lek yesterday from 103.2 at the beginning of January./ Monitor.al