Albanian President Ilir Meta accused the government of underestimating the level of public debt, saying on January 28 that it had reached the “very worrying level” of 84% of GDP.

Meta’s figure is higher than the government’s, with the Ministry of Finance recently announcing that public debt had reached 80.1% of GDP, as well as the International Monetary Fund (IMF) estimating it at 80.6% of GDP .

“The calculation of outstanding debt for 2021 is expected to include all central and local government arrears, full VAT refund of approximately ALL 24.2 billion (€200 million), decisions of international tribunals of approximately 405.2 million euros and sub-loan liabilities of approximately 405.2 million euros The real value of the public debt at the end of 2021 can be estimated at more than 84, 0% of gross domestic product,” Meta argued at a Jan. 28 press conference.

“At this level of stock again, the cases being examined before international courts are not counted; new additional outstanding public liabilities that may arise; sub-loan bonds; the growing risk of [public private partnership] PPP portfolio with budget support or unsolicited provision of state guarantees; the risk of fluctuations in exchange rates; interest rate risk, which remains significant; the risk resulting from the prolongation of the pandemic situation and its unforeseen actual effects; as well as expected effects on the economy, rising fuel and electricity prices,” reads the transcript posted on the presidency’s website.

According to data from Meta, the total value of PPP projects in 2022 will reach more than 45% of GDP. PPP projects are a contentious issue in Albania due to the unsolicited projects that have been launched in recent years, with the company proposing the project gaining an advantage in the bidding process.

“Public-private partnership projects have allowed the government to undertake new patronage investments without any immediate increase in spending or reported public debt, at least in the short term. But their off-balance sheet financing leads to a lack of transparency around future liabilities,” Meta told reporters.

The IMF and other international financial institutions have also criticized the use of unsolicited PPPs.

Meta recommended that Albania’s main economic policy objective should be to bring the debt-to-GDP ratio back to a downward trajectory as soon as possible. “Otherwise, the level of debt in the years to come could cause a serious crisis, endangering the sustainability of public finances,” he warned.