The Albanian cabinet has approved a decision to increase pensions and wages in the public sector, the government’s press office reported. Wages in the public administration will increase by an average of 5.4%. Pensions will grow by 4% in cities and by 5% in villages and some 590,000 people will benefit from the hike.
According to the 2013 state budget law, the indexations of salaries and pensions is estimated to cost ALL 1bn (EUR 7.1mn) and ALL 1.5bn, respectively.
PM Sali Berisha, who has been accused by the opposition for large fiscal pre-election spending, assured that funds envisaged for indexation have been fully guaranteed.
We note that the outgoing cabinet decided to freeze public procurement and investments as well as to reduced the expenditure on administrative services by 20% in order to ensure the country's stable fiscal position.
According to the latest official report of the finance ministry, the general budget deficit expanded by 114% y/y to ALL 38.3bn in the first five months of 2013. This was a result from a 13.3% y/y rise in expenditures, while revenues edged up 0.2% y/y in the period.
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