Five Year Government Expenditure based on Function

In the below article we will examine at the Consolidated State Budget Expenditures in the five-year 2017-2021 period, also breaking it down by Function. Social protection is the function with the highest budget support. Over 31% of total budget expenditure or over 9% of GDP over the years has been spent on providing economic assistance, pensions, unemployment, and disability payments, etc. In total, within five years, expenditure has increased with ALL 44 billion or 30% than in 2017. Also, there is an increase in expenditures in terms of GDP portion, whose gone from 9.3% to 10.9%. The increase in this category of expenditure culminates in 2020, which accounts for plus 12% expansion, mainly influenced by the increase in social assistance payments, distributed in the form of government support packages.

Source: Source: MFE( 2021) Fiscal Chart + -2 years, accompanying the Actual Budget Law 2017, 2018, 2019 and 2020
Comments and analysis: Open Data Albania

Source: Source: MFE( 2021) Fiscal Chart + -2 years, accompanying the Actual Budget Law 2017, 2018, 2019 and 2020
Comments and analysis: Open Data Albania

Source: Source: MFE( 2021) Fiscal Chart + -2 years, accompanying the Actual Budget Law 2017, 2018, 2019 and 2020
Comments and analysis: Open Data Albania

Common Public Services, which includes expenditure for executive and legislative bodies, foreign affairs, etc., rank in second place with a share of about 17% of total expenditure referring to the budget implementation. A significant weight in the is borne by the public debt costs (interests), which are classified by function only after implementation. Expenditure for this function is mainly characterized by a downward trend, falling from ALL 85.2 billion in 2017 to ALL 83.7 billion in 2020, but with a slight increase expected in 2021. The share of General Public Services against the Total Budget Expenditure has decreased by about 3% in 2020, compared to 2017, or in terms of GDP, accounts for minus 0.3%.

Economic affairs come third in terms of actual expenditures against Total Budget Expenditure. It includes expenditures for the construction of transport infrastructure, common employment issues; agriculture, forestry, fishing and hunting, energy, communications, other industries, mining, processing and construction, as well as economic development, which account for about 11% of the Total Budget Expenditure. Until 2019, the share of expenditures for this function against Total Budget Expenditure followed a downward trend. In 2020, the share increases to 11.3% and expectation for 2021 are in line with the same growing trend.

Education is the fourth largest item of public spending. Expenditure for this function accounts for more than 10% of Total Budget Expenditure. This feature has resulted in a generally increased budget support. From 10.4% in 2017 to 11.3% of total share in 2019. Expenditure on higher education have increased as well. In 2020, there is a decline in spending, coming in 10.1% of the total, as the spread of the Pandemic dictated a change in exigencies in other functions. Expenditure on education range from 3.1-3.3% of the GDP.

Healthcare, which includes hospital services, public health, general medical services and revenue generated from the special fund for Health Insurance, accounts for about 10% of the Total Budget Expenditure. It is characterized by a growing trend from ALL 45 billion in 2017 to ALL 51.6 billion in 2020 and is expected to increment further to about ALL 56 billion in 2021. The share of health expenditure vs. Total Budget Expenditure, paradoxically, results in decline in 2020 although the country went through a crisis associated with a Pandemic. Healthcare lost positions in the consolidation phase, even though in the budget plan is usually ranked second most important function, after Social Protection.

Housing and community amenities account for about 8.8% of Total Budget Expenditure. This category undergoes an increase, both in nominal value and as share of function expenditure against Total Budget Expenditure or the GDP.

In 2020, expenditure for the Public Order and Security function accounted for 6% of Total Budget Expenditure, marking a slight increase in budget portion compared to 5.8% in 2017. The increase can be explained with the implementation of justice reform and additional funding to meet its objectives. After 2019, it falls again to 6% in 2020 and as expected, even to 5.8% for 2021

The three functions with the lowest weight in the Budget are: Protection, Entertainment, culture and religious issues and (3) Environmental protection.

Source: Source: MFE( 2021) Fiscal Chart + -2 years, accompanying the Actual Budget Law 2017, 2018, 2019 and 2020
Comments and analysis: Open Data Albania

From the examination of the consolidation of Budget expenditures in the last five years, we can conclude that the three functions with the highest budget support are social protection, common services, and economic affairs. These functions are followed by different functions in different years, for example, until 2020 they are followed by education, after the function of housing and amenities surpasses the costs of education. Likewise, until 2019, education was followed by the healthcare function, but in 2019 housing and community amenities surpassed health expenditures, even after 2020 are expected to have exceeded the actual expenditures of education.

Source: Source: MFE( 2021) Fiscal Chart + -2 years, accompanying the Actual Budget Law 2017, 2018, 2019 and 2020
Comments and analysis: Open Data Albania

Likewise, until 2019, education was followed by the health function but in 2019 housing and community amenities exceed health expenditures and after 2020 it is expected to surpass even the actual expenditures of education.

Download excel: Five Year Government Expenditure based on Function
Comments and Analysis: Open Data Albania
Translated by: Rezarta Caushaj