4.5 Local Government Debt Statistics in South East Europe
Total Local Government Borrowing as a Percentage of the Capital Expenditures
Debt financing of capital expenditures varies across local governments from different
territories covered by NALAS members. (Figure 1). For example, in Montenegro debt financed 80% of local
governments' capital expenditures, while in Moldova only 10% (2008). On average, between
2006 and 2009 debt has financed around 37% of local governments' capital expenditures
from all Territories covered by NALAS members., excluding Turkey. The share of debt in the overall
financing sources of capital expenditures presents large deviations from one year to
another in almost all of the analyzed countries.
Figure 1: Local government borrowing as percentage of capital expenditures
Source: Calculation based on the questionnaires answered by local experts
Outstanding Local Government Debt as a Percentage of GDP
n all Territories covered by NALAS members, local credit markets are still in their infancy. In most of the analyzed territories covered by NALAS members (Albania, Bulgaria, Croatia, Macedonia, Moldova), local debt accounts
for less than 0.5% of GDP and less than 5% of local governments total expenditures.
In Serbia and Turkey the dynamics of local debt has been in line with economic growth,
resulting in relatively stable debt ratios during the past years (Figure 2).
Figure 2 : Outstanding debt as percentage of GDP
Source: Calculation based on the questionnaires answered by local experts
Total Local Government Debt as a Percentage of the Local Government Revenues
Local governments' indebtedness varies across analyzed countries. In Croatia, Macedonia,
Moldova and Romania local debt represents less than 5% of local governments'
total revenues. Slovenia, Serbia and Montenegro have an indebtedness level ranging
between 20-30%. Turkey stands out as the country with the highest indebtedness level
(75% in 2008).
Figure 3: Total Local Government Debt as a Percentage of the Local Government
Revenues
Source: Calculation based on the questionnaires answered by local experts