2.2 On compliance with OBL requirements As noted in the accompanying explanatory notes, the Bank of Albania finds that the draft-budget 2017 complies with the legal requirements laid down in the OBL. 2/5  BIS central bankers' speeches  Thus, beyond the reduction of the public debt: - The expected nominal GDP is within the International Monetary Fund projections, detailed in the last publication of the World Economic Outlook. - The projected level of capital expenditure is higher than the programmed level of public borrowing; - The draft-budget 2017 envisages a contingency of funds equal to 0.9% of total expenditures (ALL 4 billion), to offset adverse effects from the exchange rate and interest rate volatility on the level of public debt; - The draft-budget 2017 does not envisage revenues from privatisations. 2.3. On public finance stability The Bank of Albania deems that the programmed reduction of public debt is a positive step toward enhancing the fiscal stability and reducing the weaknesses that arise from the still-high level of public debt. Also, the OBL sets out certain legal requirements, which: - require the progressive reduction of the public debt during each fiscal year; - anchor the macroeconomic framework to IMF projections; and, - limit the concentration of the budget deficit in certain periods of electoral years, These requirements help to discipline the fiscal policy, improve public finance stability, and enhance the interest of investors, both domestically and internationally, in Albanian debt instruments. 3.

Gent Sejko: Albania’s economy and its interaction with monetary and fiscal policies Statement by Mr Gent Sejko, Governor of the Bank of Albania, to the hearing session of the Parliamentary Committee on Economy and Finance, about the draft-budget 2017, Tirana, 22 November 2016. * * *  Honourable Chairman, Honourable Members of the Committee, The steady and long-term development of Albania has been and is a constant priority of Bank of Albania’s work. Therefore, accomplishing this objective requires not only applying prudent monetary and fiscal policies, but also their constant and efficient coordination. The approval of the budget and the accompanying fiscal package is decisive for the country’s economic development. The budget and the relevant fiscal package outline the short and medium-term priorities for public finance, contribute to the long-term profile of growth and development by supporting with funds the structural reforms, and orientate the private sector development by determining the incentives on consumption and investments. Therefore, the Bank of Albania appreciates the opportunity to be able to present to this hearing session our opinion on the draft-budget 2017. In compliance with our legal mandate and the scope of our expertise, the opinion of the Bank of Albania on the draft-budget 2017 will focus on the following: Albania’s development perspectives, intertwined with the monetary and fiscal policies; Fiscal projections and public finance stability; and, Effects of projected public borrowing on the domestic financial markets. At the end, there are some suggestions on possible measures to boost the effectiveness and stability of public finances. 1.