Key developments and challenges

The environment for doing business has proven to be very difficult during the crisis, highlighting the need to push ahead with labour market and fiscal reforms and the removal of excessive licensing procedures.

Infrastructure development is a major priority for the country but further delays have occurred over the past year. The authorities need to increase technical and administrative capacities in the public sector in order to boost the absorption of available EU funds and increase financial resources for infrastructure projects.

The International Monetary Fund (IMF) stand-by arrangement (SBA) includes a commitment by the government to implement a stringent fiscal consolidation programme, including significant reductions in current spending. Although these measures may depress domestic demand in the short term, they are necessary to create the conditions for a return to sustainable growth.