FLASH
Shkruar nga Eduard Zaloshnja
It takes us 2.1 years to fully repay the public debt, if all budget revenues are used ONLY for this purpose...
The indicator that is widely used to measure the burden of public debt in a country's economy is the ratio of debt to Gross Domestic Product (GDP). It is an indicator that is often mentioned in the economic literature and in the media, and is easily understood by the general public. At the end of 2023, this public debt indicator in Albania dropped to 59.8% of GDP (according to official figures published by the Ministry of Finance).
However, in the public finance literature, another, more financially significant indicator is used – the ratio of public debt to annual budget revenues. The result of this division tells us how many years it takes to fully repay the public debt, if all budget revenues are used ONLY for this purpose (and not for other normal purposes, such as salaries, pensions, investments, etc.). In other words, this indicator serves to measure the maximum ability to repay the public debt of a country.
Currently, this indicator is at the level of 2.1 for Albania. Which otherwise means that we need 2.1 years to fully repay the public debt, if all budget revenues are used ONLY for this purpose.
This indicator of ours is the highest among the countries of the Southwest Balkans (see the graph below). Which shows that in our region, Albania has the least ability to repay the public debt. Whereas Bosnia, Kosovo and Macedonia have the greatest ability to repay their public debt.
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