In 2023, at least 10 municipalities in Albania faced severe financial distress, with outstanding debts surpassing their income. According to the Ministry of Finance, these municipalities had debt-to-income ratios exceeding 100% for the year. The municipalities with the highest debt ratios include:

Klosi (339%)

Memaliaj (270%)

Dibra (156%)

Malësia e Madhe (139%)

Puka, Peqini, Dimali, Cërriku (120%)

Kavaja and Tropoja (110%)

The total stock of arrears by the end of December 2023 amounted to approximately 4.8 billion ALL. Notably, the municipality of Kavaja had the highest debt, totaling 794 million ALL, which is 16.7% of the total arrears. Other significant debts include:

Tirana: 788 million ALL (16.6% of total arrears)

Vorë: 363 million ALL (7.6%)

Durrës: 311.5 million ALL (6.6%)

Pogradec: 224 million ALL (4.7%)

The largest portion of the arrears is attributed to "Investments" (47%), followed by "Others" (25%), "Services" (11%), and "Judgments" (9%). The increased debt related to investments and other activities reflects issues with fiscal discipline at the local level.

For districts, the majority of arrears are due to court decisions, making up 95.9% of their total obligations. The Ministry of Finance's 2022 financial status report revealed that out of 61 municipalities, 49 and 9 districts were financially stable, 8 municipalities and 1 district faced financial problems, while 4 municipalities and 2 districts experienced significant financial difficulties.

In 2023, the stock of arrears represented about 13.8% of the total own income of local self-government units, a decrease of approximately 3.6% from the previous year due to increased own income and reduced liabilities. The 4.8 billion ALL in arrears accounts for around 7% of the total actual expenses of local self-government units.