Oct 29, 2024 – The parliamentary economy committee convened today to discuss last year’s budget, focusing on key aspects such as economic performance and public debt.
Finance Minister Petrit Malaj stated, “The 2023 budget aims to continue the consolidation of the country’s economic recovery following three significant challenges: the earthquake, the pandemic, and the impacts of the crisis, which posed challenges related to high inflation and financing costs.”
According to Malaj, prudent fiscal policy regarding revenue and budget expenditures ensured a continued reduction in public debt.
“The economy has demonstrated resilience in the face of shocks, with economic activity continuing to show positive and sustainable growth, along with rising wages and employment. Macroeconomic stability indicators have consistently shown positive trends,” he noted.
“Economic growth for 2023 exceeded initial expectations, reaching an annual rate of 3.94%. According to recent assessments, real Gross Domestic Product (GDP) grew by 2.5% in the first quarter, followed by a stronger increase of 4.3% in the second quarter, and growth rates of 4.5% and 4.2% in the third and fourth quarters, respectively, compared to the same quarters of 2022. This growth was supported by increases in consumption and investments, which rose in real terms by 3.2% and 1.0% compared to 2022,” the minister stated. He also pointed out that total exports rose by about 9.5% and total imports increased by approximately 0.2% in 2023.
Malaj emphasized that the debt indicator stood at 57.5% of GDP, while the deficit indicator was recorded at 1.3%.
He continued by stating that the labor market has significantly improved throughout 2023.
“Employment increased by an average of 1.6% per year, mainly driven by higher employment in the services sector. At the same time, the unemployment rate continued its downward trend, decreasing to 10.7% in the fourth quarter of 2023, down from 11.0% at the end of the previous year (for those aged 15 and over). Additionally, the average wage rose by 13.7% compared to the previous year, reaching 75,025 leks by the end of 2023,” Malaj highlighted.
According to him, it is significant for the developments and outlook of the economy that inflation in the country has been substantially lower than in regional countries and the average of EU countries, with an average rate of 4.8% compared to 6.7% in 2022.
Malaj stated, “The declining trend of inflation during 2023 was driven by weakening foreign inflationary pressures, the strengthening of the local currency in the foreign exchange market, and the impact of monetary policy.”
He noted that gross borrowing amounted to 466 billion leks, of which 80.3% (or 374.1 billion leks) was financed through domestic sources and 19.7% (or 91.9 billion leks) through foreign sources, which supported investment and economic growth overall.
