Key developments and challenges

Key macroeconomic challenges include financing the large trade and current account deficits. Fiscal risks remain as the government continues to subsidise underperforming state-owned utilities, especially water, power generation and transmission, where revenues do not cover necessary maintenance and investment. 

Continuing EU approximation, which culminated with the recent formal bid for EU membership, as well as membership of North Atlantic Treaty Organization (NATO), has improved Albania’s image as an investment destination and should contribute to a rebound in growth in the second half of 2010 and further catch-up growth over the medium term.