The state budget has recorded a record surplus of 70.3 billion lek (about 756 million euros) in the first nine months of 2026, the highest level since the 1990s, deviating completely from the planned program.
According to mid-year changes, the budget balance at the end of the 9 months should have been positive at 25.4 billion lek, but the actual realization shows a surplus of about 45 billion lek above the planned level or 175 percent more than the plan, mainly due to unrealized expenditures.
The large difference between the planned and actual surplus is explained almost entirely by the under-execution of expenditures. A comparison of official data shows that about 95% of the surplus excess came from unspent funds against the plan and only 5% from additional revenues.
Despite this failure to materialize, the government, instead of fixing this anomaly, so that the government can turn taxes into services and investments for citizens, has decided to throw the ball in one direction again, further increasing the fiscal burden for the coming year by at least an additional 150 million euros that citizens and the economy will have to pay.
The new fiscal deficit foresees that the profit tax for businesses will increase from 15 to 17%, dividends from 8 to 15%, and the VAT threshold for businesses will decrease to 5 million lekë. Although the reduction of the VAT on food from 20 to 6% is foreseen, the increase of the VAT from 20 to 21% for all other products almost amortizes this reduction.
The non-implementation of the spending plan deepens
The inability to execute the budget deepened further this 9-month period, calling into question the government's intentions to further increase the fiscal burden and budget revenues through it at a time when the ability to spend these funds is deteriorating year after year.
In 2026, the underperformance of the spending plan has deepened to 7.2%, from 4% in 2025 and 4.8% in 2024. This is the largest difference in the last three years.
Historical data shows that the ratio between revenues and expenditures has changed significantly. In the first nine months of 2019, for every 100 lek collected, the government spent about 101 lek. In 2026, for every 100 lek of revenue, only 89 lek is spent.
While the state manages to collect the planned funds from taxes and other sources, a portion of the programmed expenditures is not realized within the period, postponing the effects that these funds would have on the economy. The extent of the non-realization against the plan raises questions about the quality of budget programming and the ability of institutions to execute the funds within the deadlines.
Of the difference of about 45 billion lek between the actual and the programmed surplus, the vast majority is related to unfinished investments. Capital expenditures reached 62.8 billion lek during the nine-month period, from about 83.5 billion lek that was planned, being realized at a rate of 75.2%. While current expenditures were realized at a rate of 95.7% of the plan, for public investments almost a quarter of the programmed funds remained unused.
Unlike savings that can come from reducing administrative costs or improving spending efficiency, failure to implement public investments according to the programmed calendar creates negative effects on the economy. Funds planned for roads, water supply, schools, hospitals and other public infrastructure are intended to finance projects that generate economic activity during construction and improve services and productivity and promote economic growth in the long term.
If in the past the main challenge of public finances was to secure sufficient revenues to cover expenditures, data from recent years shifts the focus mainly to the capacity to realize programmed expenditures and especially to the effectiveness of funds spent./ Monitor
