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Economy

The medium-term budget program 2022-2024 enters into force; economic growth of 5.5% is expected this year

  • 7/30/2021 6:43 PM
The medium-term budget program 2022-2024 enters into force; economic growth of 5.5% is expected this year

The government keeps the economic growth projections for 2021 unchanged, according to the draft decision of the medium-term budget program 2022-2024 published in the Official Gazette.

Earlier, the Minister of Finance and Economy, Anila Denaj in 2020 when presenting the draft budget for 2021 said that economic growth of 5.5% is expected to be achieved after two shocks from the earthquake and the pandemic.

"After the strong review in 2020, with a decrease of 4% according to the latest estimates of INSTAT, the economy is expected to recover in 2021 and continue the positive trend in the medium term. Over the medium term, growth is expected to be generated by domestic demand, consumption and investment. In concrete terms, according to the draft decision of the medium-term budget program, economic growth is projected at 5.5% for 2021 and is also projected to remain above 4% during the following period. More specifically, economic growth for 2022 will be 4.8%, for 2023 growth of 4.5% and 3.9% in 2024.

Final consumption for the medium term 2022-2024 is projected to grow in real terms on average around 3% per year, contributing on average 2.7% per year to GDP growth. While total investments in the economy are projected to grow in real terms around 6.4% in the years 2022-2024 with a contribution to total growth of 1.5% per year.

According to the document, fiscal policy will be oriented towards consolidation in the medium and long term, the government's budget policy to maintain an investment level above 4.5% of GDP (2022-2024) will affect the formulation of fixed capital supported by high growth in the medium and long term.

This fiscal framework targets an overall fiscal deficit of 2.9% in 2022 from 6.5% projected in 2021, a level of 2.3% of GDP in 2023 and 2% of GDP in 2024.

Simultaneously as a result of two consecutive shocks, the earthquake and more from the pandemic, the primary balance is expected to mark slightly negative values ​​at 0.1% in 2022, although with a strong improvement from the level of 3.9% projected by the end of 2021. The return to positive values ​​is targeted at 2023 at 0.6% and at 2024 at 1.1%.

Employment aims to increase the participation of unemployed jobseekers of special groups by 50% from employment programs.

/Klara Ruci/