TIRANA (Albania), November 13 (SeeNews) – Albania should vigorously pursue reform in the power sector, the European Bank for Reconstruction and Development (EBRD) said on Tuesday.
Short term priorities include further liberalisation of the electricity market, enforcing payment discipline in state-owned companies and improving the regulatory framework to ensure cost-reflective tariff-setting, the EBRD said in its Transition Report 2018-2019.
“Albania’s requirements in areas such as roads, railways and ports remain numerous, but it is vital that investment projects are tendered according to best practice competitive rules and standards,” according to the report.
Factors holding back credit growth in Albania should be tackled, the EBRD said, noting that non-performing loans have declined but remain high by regional standards and are holding back credit growth.
The EBRD also noted that robust economic growth in Albania is driven equally by private consumption and investment, monetary policy remains accommodative, while fiscal deficits have been reduced.
“The European Council at its meeting in June 2018 set out the path towards opening EU accession negotiations with Albania in June 2019, subject to further progress in reforms,” the bank added.
Consolidation is taking place in Albania's banking sector which now comprises 14 lenders, two fewer than in mid-2017, the EBRD said
Albania's economy is expected to grow by 4.0% in 2018 after growing by 3.8% in 2017, according to the bank.
“The construction of two major energy projects, namely the Norwegian investment in hydropower plants on the river Devoll and the Trans Adriatic Gas Pipeline (TAP), was the main contributor to overall investment, although the direct economic impact on GDP is expected to decelerate in the short term,” the EBRD said.