Over 70% of the deficit is covered by domestic borrowing - Foreign credit is mainly used to refinance existing debt
To cover the 63.7 billion lek budget deficit, the government will rely mainly on domestic borrowing next year, while a smaller portion of financing will come from external sources.
According to official documents, total budget revenues for 2026 are expected to reach 823 billion lek, while expenditures are projected at 886.7 billion lek. The difference between these two figures creates the deficit that the state will have to finance through borrowing.
The majority of the spending goes to current expenses, such as salaries, pensions, health, education and the functioning of the administration, amounting to 704.6 billion lek. While 179.6 billion lek are planned for capital investments, mainly in infrastructure and development projects.
According to the Annual Borrowing Plan, to cover the deficit, the government will rely mainly on domestic financing. Around 53.4 billion lek, or over 70% of the deficit, is expected to be secured from the domestic financial market. Only 45 billion lek will be net borrowing within the country, mainly through bonds and notes.
On the other hand, foreign financing will be more limited, at 10.3 billion lek. Although the state expects to obtain 29.2 billion lek in long-term loans from abroad, a large part of these funds will be used to repay existing debts, at 36.7 billion lek. This significantly reduces the net benefit from foreign borrowing.
The document shows that for 2026, the government aims to keep the deficit at controlled levels, relying more on domestic resources and less on foreign borrowing. However, the budget remains dependent on debt to cover expenses, while the main weight of financing falls on the domestic financial market.
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