Albania plans to raise between 500 and 700 million euros with a new Eurobond issue by the end of October, Finance and Economy Minister Delina Ibrahimaj announced on October 14.

The bond will be used to support the state budget, including funding for the education system and infrastructure, as well as for next year’s budget, Ibrahimaj told reporters after a government meeting on Oct. 14, as reported by local media.

Among the decisions approved at the meeting was the “proposal for the issuance of Eurobonds by the Ministry of Finance and Economy to secure the borrowing of funds necessary to finance the state budget deficit,” wrote Ibrahimaj on Facebook.

“This is the fifth time that we have entered global markets in order to obtain foreign currency funds and it has been a test for our government, which will test our credibility in international markets. The financed amount has increased and the interest on [our] the obligations have fallen, which shows that over the years, we have been able to create an economy worthy of confidence in the eyes of international markets, ”commented the Minister.

It was revealed in June that the country plans to raise new funds in international markets. The news fell ahead of the approval of the 2021 budget changes on July 1.

Albanian Minister of Finance and Economy at the time, Anila Denaj, said at the time that the budget amendments were made to provide tax incentives to support the economic recovery as well as to finance the purchase of coronavirus vaccines (COVID-19) and infrastructure investments.

More controversially, the government is said to have planned to buy military drones from Turkey and build a new national theater after the old theater was demolished last year, despite strong opposition.

The new issue is planned despite the increase in Albanian debt since the start of the pandemic. Albania became the country in the Western Balkan region with the highest public debt-to-GDP ratio in the third quarter of 2020, even surpassing Montenegro, whose high debt ratio has long been a cause for concern, as the show data compiled by the European Commission. in January.

In Albania, the public debt-to-GDP ratio reached 79.9% of GDP, higher than in Montenegro (78.1%) and Serbia (57.1%), according to the report. Before the crisis, Albanian public debt stood at only 66.2% in 3Q19. The rate was on a steady downward trajectory between 2016 and 2019.

The International Monetary Fund (IMF) said on October 12 that Albania’s debt is expected to rise to nearly 80% of GDP by the end of this year, despite the economy recovering from the crisis. coronavirus and the 2019 earthquake. Fund officials urged Tirana to recreate fiscal policy space by lowering “very high” budget deficit and public debt ratios, as well as investing effectively in people and the economy.

“With the recovery strengthening, fiscal policy should shift to rebuilding firepower to withstand future shocks and reduce debt while meeting Albania’s development needs – all of this will depend on increase in tax revenues ”, according to the IMF mission.

Albania tapped international markets for the last time in June 2020, raising 650 million euros. The issue, which was heavily oversubscribed, carried a coupon of 3.65%.