"The management of the public debt is improved" - Minister Petrit Malaj, in the parliamentary Committee on the Economy
The Minister of Finance, Petrit Malaj, is reporting to the parliamentary Economy Committee on the public debt.
"The debt currently consists of:
- internal debt, which accounts for about 57.5% of the total debt, and
- external debt, which accounts for 42.5% of it.
The year 2024 marked a further improvement in terms of public debt management and borrowing. The indicator of the share of external debt has suffered a decrease from the last one of 2023, where this indicator was estimated at 45.6%. We aim to further reduce it in the medium term, in line with the medium term debt management strategy which aims at increased caution regarding debt exposure to exchange rate fluctuations and keeping the issued debt below 50% in foreign currency.
From the perspective of the life of the debt, we have:
- short-term debt (with a maturity of up to one year) which constitutes about 15% of the total debt,
- debt with maturity over one year at the level of about 85% of the total debt.
Increased attention has been paid to the longevity of the debt and in particular the domestic debt, which presents a higher refinancing risk. Therefore, the focus of debt management has been and remains in the direction of increasing the lifespan of domestic debt, year after year. His life expectancy currently, at the end of the nine months 2024, is at the level of 928 days (2.56 years), which marks not only an improvement compared to the level at the end of 2023 (835 days or 2.3 years), but also marks the continuity of a targeted and achieved improvement over the years, where in the time frame of 5 years this indicator has increased by over 100 days and in the time frame of 10 years this indicator has increased by about 300 days, thus reducing the risk of refinancing internal debt".
During the last years, the exposure to interest rate risk has been managed through the expansion of the domestic debt portfolio with long-term bonds with fixed interest rates.
As part of the state debt, we also emphasize the guaranteed debt, which at the end of September 2024, is estimated at about 35.6 billion Lek (1.5% of GDP), marking a decrease of about 5.8 billion Lek compared to the end of 2023. Guarantees in the domestic market account for about 40.7% of the total stock of guaranteed debt or ALL 14.5 billion, while the guarantees given in favor of foreign creditors represent 59.3% of the guaranteed debt stock or ALL 21.1 billion.
About 79% of the total state guarantees belong to the energy sector, reflecting the government's policies in terms of supporting this sector, especially during the most recent years in the conditions of the difficulty this sector faced.
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