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4.0 Budget and debt outlook

4.1 Budget and debt - Albania

Albania’s 2023 budget is based on projected revenues of ALL632bn
(€5.4bn), or 29% of GDP, up 9% compared to the figure forecast for
2022. Spending is projected at ALL687bn, or 31.6% of GDP.

The draft 2023 budget envisages a reduction in the budget deficit from
3.3% of GDP predicted for 2022 to 2.6% of GDP in 2023. The primary
balance is expected to swing from a deficit of 1.3% of GDP in 2022 to a
surplus of 0.2% of GDP in 2023.

Albania plans to raise at least €500mn through a Eurobond issue in
2023, Finance Minister Delina Ibrahimaj said in November. According to
Ibrahimaj, preparations for the Eurobond issue have already started,
but it will only go ahead if market conditions prove favourable.

The bond issue has been included in the 2023 budget, but Ibrahimaj
stressed that the government has other options if it decides not to
proceed with the issue.

Albania issued its fifth Eurobond in November 2021, to support its
budgets for 2021 and 2022. The €650mn 10-year sovereign Eurobond
was issued with a coupon of 3.50%, down from 3.625% on the previous
Eurobond.

In its opinion on the draft budget for 2023, the Bank of Albania
commended the government’s fiscal consolidation efforts but warned of
the risk that the deficit may exceed the planned value.
The central bank said it supports a consolidation process guided by the
increase in budget revenues, as well as a controlled increase in current
spending in the short term in response to inflation.

“However, the Bank of Albania finds that the balance of risks in the
Budget lies in the direction of expanding the deficit,” central bank
Governor Gent Sejko told the parliament Commission for Economy and
Finance, a Bank of Albania statement said.
"These risks stem from the downside risks on economic growth and the
realisation of the anticipated level of income, as well as from the

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