E fundit!

10:45 TODAY

Ranking of candidates/Names expected to take over the leadership of the DVPs in several districts

The evaluation process for candidates who intend to take o...

Draft budget 2026, 887 billion lek expenditures, expands 6.7%

2025-11-04 15:41:00, Ekonomi CNA

The government programs in the 2026 budget, 823 billion lek in revenues, which are 6.8% higher than the initial 2025 budget and 6.8% more than the last normative act.

Budget expenditures are 887 billion lek or 8.9 billion euros, an increase of 6.7% compared to the last normative act. The budget deficit is projected at 63 billion lek from 61 billion in the last normative act.

Revenue programming for 2026 supports the Ministry of Finance's goals of increasing revenues, as well as keeping the budget deficit and public debt under control.

This program is based on improving fiscal administration and minimizing informality in the economy, as well as on the factors that will influence this period and the potential risks that may arise.

In programming revenues from Taxes and Customs for 2026, the main factors affecting the budget have been taken into account, including the effect of economic growth and the price index, the effects of old and new tax and budgetary policies, as well as the effects of the implementation of the measures of the Medium-Term Revenue Strategy and Action Plan (SAA) 2024–2027, accompanied by anti-evasion legal measures aimed at increasing the level of voluntary compliance of taxpayers with the law.

In 2026, revenues from "Taxes and Customs" are projected to be 531,137 million lekë, with an increase of 31,516 million lekë compared to revenues from "Taxes and Customs" according to the Normative Act, or an increase of 6.3%.

Revenue from social and health contributions is projected to be 196,967 million lekë, with an increase of 20,165 million lekë compared to revenue from contributions according to the Normative Act, or an increase of 11.4%.

Expenditures $8.9 billion, up 6.7%

Total public spending for 2026 is planned at 886.7 billion lek or 31.9% of GDP.

Personnel costs for 2026 reflect the current cost of Public Administration, the full cost of wage indexation at 2.5%, and the effects of the entry into force of the minimum wage of 50 thousand lek per month. The total cost of the minimum wage increase together with indexation is projected at around 10 billion lek.

Total expenditures for salaries in the Public Administration at the central level for 87,112 employees are planned at 140.1 billion lek or 5% of GDP.

Interest expenses are projected at 64.2 billion lek or 2.3% of GDP, including a reserve of 6.3 billion lek to mitigate potential risks from fluctuations in interest rates, exchange rates, etc.

Operating and maintenance expenditures for central government for 2026 (excluding expenditures incurred by public institutions that have as a source of financing revenues outside the limit), are projected at 81 billion lek or about 2.9% of GDP.

This item is programmed to prioritize support for existing central government policies such as: the farmers' scheme, maintenance of national roads, maintenance of information technology systems and cybersecurity, employment promotion programs, schemes to support economic development, and support for education and sports.

Local budget expenditures for 2026 are projected at 97.7 billion lekë, marking an increase of 9% compared to the 2025 budget. These expenditures represent 3.52% of Gross Domestic Product (GDP), up from 3.4% in 2025 and 2.3% in 2015.

The unconditional transfer for 2026 is projected at 27.8 billion lek, which represents an increase of 1.6 billion lek or about 6% more than in 2025. Compared to 2015, the year before the implementation of the administrative-territorial reform, this transfer has increased by 15.5 billion lek, or more than double.

In addition to the unconditional transfer, the following additional funds are also foreseen in 2026:

13.8 billion lek as an unconditional sectoral transfer for new functions;

200 million lek as a performance grant, which is used as a financial mechanism to encourage performance in local government;

5.5 billion lek as sectoral transfers for wage increases.

In total, the grant from the state budget to local government in 2026 will reach 47.3 billion lek, up from 43.1 billion lek in 2025, an increase of 4.2 billion lek or 9.7%.

Special fund expenditures, which include total expenditures for the Social Security Fund, Health Fund, and compensation in value to former owners, are planned at a value of 286.6 billion lek.

The level of expenditure for the Social Security Scheme for 2026 is projected at 204.1 billion lek or 7.3% of GDP. From this fund, a level of 1.65 billion lek is projected for pension indexation and 10 billion lek for the monthly bonus for pensioners. Meanwhile, the expenditure of the Health Care Insurance Scheme for 2026 is projected at 67.3 billion lek or 2.4% of GDP.

For 2026, an additional 1.5 billion lek is planned in the FDSKSH budget, respectively 500 million lek for the reimbursement of oncology drugs in primary care and 1 billion lek for hospital services for the provision of oncology drugs.

Finally, expenditures for the Owners' Compensation Fund are projected to total 3.5 billion lek or 0.1% of GDP.

Other social expenditures include funds for unemployment benefits, disability benefits, economic assistance, compensation for former political prisoners, and birth bonuses:

Unemployment benefit expenses are projected at 1 billion lek;

Expenditures for the payment of economic assistance and disability are projected at 23.9 billion lek or 0.9% of GDP;

A fund of 1.5 billion lek or 0.1% of GDP has been provided for the former persecuted;

A fund of 2.3 billion lek or 0.1% of GDP has been foreseen for the birth bonus.

Subsidy spending is projected at 2.45 billion lek or about 0.1% of GDP. State subsidies for 2026 are focused on financing employment incentive schemes, supporting the water supply and sewage sector based on its performance, as well as covering part of the costs of railway activity and government services.

Compared to 2025, this item is accompanied by an increase of 500 million lek, where 450 million lek are allocated to the subsidy for employment promotion programs to fulfill commitments under the Growth Plan with the EU, as well as to cope with the effect of indexation of the minimum wage increase.

Public investments for 2026 are planned at 6.5% of GDP or 179.6 billion lek (including the reconstruction fund in the amount of 5 billion lek and 6.8 billion lek of expected project-based financing from the Growth Plan with the EU).

In the investment planning for 2026, all contractual obligations for investment projects with foreign and domestic financing have been taken into consideration and priority will be given to financing ongoing projects.

Compared to the revised 2025 budget, the volume of public investments in 2026 is projected to be around 15.5 billion lek more.

The Reserve Fund level for 2026 is planned at 2.5 billion lek or 0.1% of GDP.

Deficit 63 billion lek

The budget deficit for 2026 is planned to remain at 2.3% of GDP, maintaining the same level as that expected for 2025. The primary balance is expected to be balanced in 2026, in accordance with the fiscal rule provided for in the LOB, which determines that starting from the budget year 2024 and for each subsequent year, the primary balance cannot be negative (i.e., be at least balanced or positive).

The current fiscal balance (the difference between public investment and the fiscal deficit) will be positive also in 2026, at 4.2% of GDP, up from the 3.8% expected in 2025, in accordance with the relevant fiscal rule (the "golden" budget rule).

Also, gross public debt will continue its downward trajectory in accordance with the relevant fiscal rule (the "debt-containment" rule of public debt sustainability).

In 2025, gross public debt is projected to decrease to around 54.1% of GDP and is expected to continue to decline further to around 53.6% in 2026. According to the baseline scenario, gross public debt is expected to decline to around 51.0% in 2028 and further to around 46.4% in 2031./ Monitor