Political impasse slows European integration
Overview:
The Albanian economy performed well despite the onset of the global economic crisis posting positive growth in 2009. Indeed, after a marked slowdown GDP is now accelerating once more. Inflation is low and the current account deficit is falling. The move to a more flexible exchange rate regime helped the economy adjust to the large negative external shocks it suffered. The key economic challenge for the government is to reduce the large fiscal deficit in order to stabilise the high and rising public debt to GDP ratio. It has committed to do so although the IMF is not convinced that its fiscal plans are fully credible. Albania has made considerable progress in EU integration. However, the entrenched political stand-off between the government and the opposition is delaying progess towards candidate status.