Albanian bank experts call for improved distribution of expenses, borrowing

The Bank of Albania experts believed that the Albanian government should make further efforts to improve the distribution of expenses and borrowing throughout the year, local media reported Sunday.

The uneven distribution of expenditures and public borrowing has been and remains a problem in the Albanian public finances, experts said.

Actually, the central bank has been emphasizing constantly that the concentration in the last quarter of the year tends to reduce the effectiveness and increase volatility of financial markets.

In addition, the experts told media here that the way the budget deficit and public debt are financed is as important as their level, noting that the financing structure of the Albanian debt was and remains stable.

According to them, the domestic debt is shifting towards longer-term maturities and its sensitivity against short-term volatilities on interest rates is downward. In parallel, the external debt is mostly in concessionary terms and has long-term maturity.

In view of the central bank, Albanian public debt showed an increasing trend of financing from external resources as in the last decade, the share of external debt to total debt increased by 16 percentage points.

For this reason, the Bank of Albania drew the attention on the increasing exposure of debt servicing cost and level against exchange rate volatilities.

This implies the need for added attention to external borrowing, in particular to the one in commercial terms, which should be considered as the last option in the list of possible financing resources, bank experts added. Endit