A new World Bank study on Albania's public finances raises strong concerns about the way public funds are used, highlighting that the country faces high costs in the transport sector and serious problems in the quality of infrastructure projects.
The report "Albania Public Finance Review 2025" analyzes public spending and assesses that improving the quality of investments, especially in transport, is essential for economic growth and rapprochement with the European Union.
According to the report, Albania has made significant investments in infrastructure, spending nearly 6% of GDP on public investment, but the transport network continues to suffer from major problems. Roads are characterized by poor condition, traffic congestion and pollution, while rail and maritime transport remain hampered by outdated infrastructure.
The World Bank emphasizes that eliminating inefficiencies in infrastructure investments can significantly increase the overall quality of infrastructure in a country. Specifically, improving the efficiency of spending on energy and transport could increase the infrastructure index by up to 18.6%.
This would improve the competitiveness of the economy and the quality of public services, reducing costs for businesses and citizens.
The report warns that fiscal risks in Albania are also related to liabilities from state-owned enterprises and public-private partnerships (PPPs), especially in the energy and transport sectors.
The poor efficiency of public investment remains a persistent concern, increasing pressure on public finances and limiting the effect of investment on economic growth.
Experts estimate that improving transparency and management of infrastructure projects is essential to avoid increasing debt and ensuring that investments deliver the expected results.
Another major problem is related to the impact of climate change. The transport and energy sectors are considered highly exposed to climate risks, while funding for disaster management and environmental protection remains insufficient.
To move closer to regional standards, Albania will need to increase spending on climate and the environment by 0.4–0.9% of GDP.
The World Bank recommends that Albania focus on improving the selection of infrastructure projects, increasing spending efficiency, strengthening institutions, and monitoring investments.
According to the report, without increasing the quality of investments and without better prepared projects, high transportation spending risks not having the expected effect on economic development.
The study emphasizes that Albania does not only have a problem with the level of investments in transport, but above all with their quality and efficiency. Improving project management and increasing transparency are considered crucial for economic growth and rapprochement with the EU./Monitor.al/
