Government unveils 2025–2029 debt management strategy
The Albanian government has put forward for public consultation a new Debt Management Strategy for the 2025–2029 period. At the end of 2024, public debt stood at 1.365 trillion ALL, or 54.2% of GDP. The plan aims to bring this figure down to 45% by 2029, placing the debt on a sustainable downward trajectory.
Why is this important: Lowering public debt is a key priority for maintaining macroeconomic stability and reducing vulnerability to external shocks. A steady decline from 64% of GDP in 2022 to a targeted 45% in 2029 would mark one of the most significant fiscal consolidations in the region.
Context: The Ministry of Finance highlighted the strong domestic financing of the debt in 2024:
“Only in 2024, total borrowing reached 404 billion ALL, of which 94% was secured domestically. External debt accounted for 42% of the total at the end of 2024, down sharply from 50% three years ago. The government aims to maintain 80–85% of financing from the domestic market between 2025 and 2029. In this way, debt will be more sustainable and less exposed to currency fluctuations.”
Another major goal is developing the domestic market for government securities and reducing rollover risk:
“The new strategy plans to reduce debt maturing within one year from 39% in 2024 to around 20% by 2029. Interest payments are expected to drop from 2.3% of GDP in 2024 to below 2% by the end of the period. This will be achieved by increasing the use of longer-term bonds and reducing short-term treasury bills. The final objective is for public debt to reach 45% of GDP by 2029.”
The document does not introduce additional budgetary costs but is designed to balance borrowing costs with risk, ensuring debt sustainability and fiscal space for priority investments over the coming years.
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