DREAM / The Prime Minister resigns and wakes up under the Parisian bridge!

 Kliko këtu për të tjera
Voxpress:

Sejko: The pension scheme is a challenge for the budget, to raise the second pillar with compulsory insurance for private individuals

2023-11-10 12:31:00Biznes SHKRUAR NGA REDAKSIA VOX

Sejko: The pension scheme is a challenge for the budget, to raise the second

The pension scheme continues to be a problem, not only to have a normal pension in our country, but further deepening the hole in the state budget. In a note a few days ago, VoxNews also listed the main factors influencing the non-functioning of this scheme, such as the aging of the population, retirement age, years of contributions, etc.

Today, the Bank of Albania comes with a new recommendation for the promotion and operation of this scheme, as this institution considers the development of private pension pillars.  

The Governor of the Bank of Albania, Gent Sejko, expressed today in the Parliamentary Committee on Economy and Finance the institution's opinions on the draft budget for the next year.

Sejko said that the financial stability of social insurance and health schemes continues to be a serious challenge for state finances, especially in the context of unfavorable demographic trends and the free movement of the workforce.

"In the draft budget of 2024, these schemes are expected to create a deficit around the level of 3.6% of GDP, or 1.1 percentage points higher than the general budget deficit. For this reason, the Bank of Albania suggests the periodic review of the legal framework that regulates the pension scheme, the health insurance scheme and other social insurance schemes. Likewise, we encourage the intensification of efforts to develop the second and third pillars of the private pension system, that of mandatory and voluntary insurance. These important pillars of modern pension systems would contribute to increasing the adaptability of social and health insurance schemes to demographic changes and placing them on sustainable and affordable trajectories for the state budget," he said.

The governor underlined that the level of public revenue collection in Albania is at low levels compared to the countries of the region and the government must find ways to increase this revenue. The rate of public revenue collection in the country – currently around 28% of GDP – remains relatively low compared to that of countries in the region, whose average is around 36% of GDP.

He said that the timely consolidation of the health of public finances should be based on the progressive increase in the level of revenue collection.

"This approach helps the sustainability of public debt and preserves the necessary spaces for spending in support of strategic development priorities, and more specifically for investments in education, health and infrastructure. The sustainable growth of public revenues must be carried out by a line of action, which must first aim at reducing informality and further look at the scope for simplifying and balancing the tax burden, between different economic categories and social strata," said Sejko. .

The Bank of Albania suggests the adoption of a work plan, which should aim at a sustainable increase in the level of public income.

On the expenditure side, the Bank of Albania supported maintaining the consolidation direction of the fiscal policy which, according to him, enables a faster and lower-cost return of inflation to the target.

"Maintaining the consolidation direction of fiscal policy serves the long-term stability of public finances. Projections of the draft budget suggest that public sector gross debt is expected to fall below 60% of GDP during 2024, marking its lowest level for more than a decade. As we have continuously emphasized, the high level of public debt has been and remains one of the structural weaknesses of the Albanian economy, reducing our ability to withstand shocks and dictating higher financing costs for the private sector. For this reason, we have sought and supported every initiative and fiscal policy that enables the sustainable reduction of public debt," he said.

Sejko once again drew attention to the fact that the realization of the investment plan should have a more even distribution during the year. According to him, their chronic concentration in the second half of the year causes unnecessary fluctuations in economic indicators and financial markets, reducing the efficiency of public spending.

The Bank of Albania repeated this year the suggestion for the inclusion of long-term legal ceilings on the total contracted value of PPPs. According to the Governor, this regulation would be a complementary element of controlling the level of potential risk that PPPs may have on the health of public finances. Also, the Bank of Albania suggests the continuous improvement of the professional capacities of the units that administer the assessment, contracting and monitoring of these projects, especially regarding the legal and financial obligations that they impose on the Budget.


Në përputhje me standarded JTI

Video

SHIKO KANALIN NE YOUTUBE
×