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The government directs funds coming from economic growth to investments, but fails to realize them

Politiko 2026-06-25 08:25:05

The government directs funds coming from economic growth to investments, but

The Albanian government's forecasts for public investments throughout 2026 have undergone a significant upward revision compared to the 2026-2028 Macroeconomic Framework.

According to official data from the Ministry of Finance reflected in the Forecast Deviation Report analysis, funds allocated for public investments are expected to reach 179.8 billion lek in the 2026 budget, marking an increase of 12.2 billion lek compared to the Macroeconomic Framework.

This change brings the share of capital expenditures to 6.5% of Gross Domestic Product (GDP), from 6.1% targeted in the initial plans. According to the Ministry of Finance, the increase in the investment budget is supported entirely by domestic financial resources, which have also compensated for the decline in foreign financing.

The main pillar of this positive revision is Domestic Financing, which increases from 112.4 billion lek in the initial plan to 126.8 billion lek in the approved Budget, an increase of a full 14.3 billion lek or about 12.7% more.

Within this item, it is worth noting the new allocation of 1 billion lek specifically dedicated as "Capital injection/return from AIC (Albanian Investment Corporation) / BZHSH (Albanian Development Bank)", an item that was not foreseen in the framework at the beginning of the year.

Unlike domestic sources, Foreign Financing has suffered a contraction of around 2.1 billion lek in the 2026 budget compared to the Macro Framework.

According to the Ministry of Finance, this slowdown is mainly due to foreign funds in the energy sector, which will not be able to allocate about 2 billion lek that were foreseen in the Macro Framework. On the other hand, funds related to the European Union's growth plan ( New Growth Plan ) remain 6.8 billion lek in the 2026 budget with a negligible decrease of 86 million lek compared to the Macro Economic Framework.

The government has decided not to change the funds allocated for the earthquake recovery process. The Reconstruction Fund remains exactly at the value of 5 billion lek (0.2% of GDP), fully supported by the state budget, guaranteeing the continuity of projects without any deviation.

The Ministry of Finance said it revised public investments upward in the 2026 budget, as the nominal Gross Domestic Product (GDP) has been revalued with an increase of 24.7 billion lek in the 2026 budget.

But as investment funds increase, the government's weaknesses in implementing them are deepening. Capital expenditures from the state budget were only 14.8 billion lek in the first quarter of 2026, the lowest level since 2015.

Official data shows that, while the need for infrastructure is increasing due to integration criteria, the state's ability to make capital investments has fallen to alarming levels, directly linked to major corruption scandals involving key Albanian institutions mandated to take care of the country's critical infrastructure./ Monitor

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