Albania’s Garment Sector Gets a Big $4 Billion Boost in Updated Budget
In a recent development, the Council of Ministers gave the green light to a Normative Act, ushering in amendments to the 2024 budget. Following a government meeting, Finance Minister Ervin Mete shared that the primary objective of this legislative move is to extend support to the garment sector. A substantial injection of Lek 4 billion is earmarked through a new state guarantee, aiming to fortify the sector against external shocks, enhance technological processes, and foster increased productivity.
Minister Mete underscored the significance of this financial boost, stating, "Through this Normative Act, we are backing a State Guarantee Instrument of Lek 4 billion to aid businesses in the fashion processing industry. This support is crucial for improvements in technological processes and heightened productivity, equipping the sector to navigate income shocks resulting from external factors."
Highlighting key budgetary revisions, Minister Mete revealed an upward adjustment of projected revenues for 2024, estimated at around Lek 687 billion, constituting 28.2% of the GDP. Emphasizing fiscal consolidation at the macro level, the Minister anticipates a declining trajectory in public debt and a lower deficit than initially forecasted in this year's budget.
The Normative Act encompasses various budgetary adjustments, including the reorganization of ministries based on new areas of responsibility. Additionally, it addresses the reclassification of funding for the new commercial port, financing for environmental protection and tourism development, and financial support for building reconstruction and infrastructure enhancement in professional education—a testament to the government's commitment to this sector.
Minister Mete took a moment to reflect on the robust performance of the economy in the past year. Notably, he shared that by the end of the 2023 budget year, key macro-economic indicators exhibited significant improvements, setting the stage for a positive trajectory in 2024. Revenues reached Lek 643 billion, a remarkable 12.3% increase compared to 2022.
In terms of social security, contributions collected accounted for 5.7% of GDP, leading to a substantial reduction in the scheme's deficit to nearly 0.8% of GDP—the lowest level on record. Public debt witnessed a decline to 59.2% at the close of 2023, marking the lowest since 2010 and pre-pandemic levels. Additionally, the primary balance returned to a positive position, and the budget deficit stabilized at 1.4% of GDP.
Minister Mete's positive outlook for the economy remains unwavering, as he anticipates the continuation of this favorable trend throughout 2024. The government's strategic fiscal moves aim not only to address immediate challenges but also to lay a solid foundation for sustained economic growth.
