Page 65 - Central & Southeast Outlook 2020

3.1 ​Budget - Albania
Albania plans a budget deficit of 1.6% of GDP in 2020, the lowest in the last two decades, following a planned gap of 1.9% of GDP in 2019.
The 2020 draft budget will support government-initiated reforms promoting economic growth, employment, improving the quality of services to citizens and the EU integration process.
Total revenues for 2020 are projected at ALL502.6bn (€4.1bn), 6.2% higher than the expected revenues in 2019, while budget costs are projected at ALL532bn, or about 29.7% of GDP, 5.1% higher y/y.
The sectors that will have the most support are education, health, agriculture and infrastructure, which are important to stimulate potential growth in the economy. However, the budget may yet be adapted to take into account reconstruction costs following a deadly earthquake in November 2019 that left thousands of people homeless.
“Reconstruction of damaged dwellings is foreseen to start shortly after the estimation of damages by end of January 2020. The government will start to reconstruct with an amount of USD 200 mn but predicts to allocate up to 0.4% of GDP,” said Raiffeisen in a note on Albania. “The budget deficit is contained with an estimated value of 0.5% of GDP till October 2019 and even though the expenses are usually postponed for the year end we do not expect a budget deficit higher than 2% of GDP. But for the next year [2020], we predict expansion of the budget deficit to 2.2% or higher to cover the financial effects of the natural disaster.”
According to the European Commission, Albania’s budget execution improved in the second half of 2019, with both revenue and expenditure broadly in line with the plan. A budget deficit below 2% of GDP is expected by the end of 2019. In the absence of additional measures, the deficit is forecast to hover around 1.5% of GDP in the medium-term.
The main fiscal risks stem from the possible further accumulation of payment arrears and from the materialisation of contingent liabilities from public-private partnerships.
3.2 ​Budget- Bosnia & Herzegovina
Due to the significant delay in the process of government formation, Bosnia will most likely begin 2020 with the same budget parameters as in the first quarter of 2019.
65​ CESE Outlook 2020​ ​ ​www.intellinews.com