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TIRANA (Albania), February 9 (SeeNews) – The aggregate index of the average infrastructure development in Albania is 70% lower than the European Union (EU) average hindering further regional integration, the International Monetary Fund (IMF) said.
The low infrastructure development limits deeper regional integration, prevents Albania and also the other Western Balkan countries from reaping benefits of economies of scale, and reduces their attractiveness as a destination for foreign direct investment inflows, the IMF said in its report "Public infrastructure in the Western Balkans: A highway to higher income" on Thursday.
Western Balkan countries have underdeveloped transport, power, and telecoms networks, IMF said, adding that the average infrastructure development in this region is about 50% lower than the EU average.
In the energy sector, the gap is more uneven with Albania and Kosovo suffering from an unstable energy supply and frequent outages, coupled with large distributional losses, due to obsolete and low-capacity power plants.
However, the current pace of investment in public infrastructure is unlikely to be sufficient to quickly bridge the gap, the report said, adding that over the past decade and a half, Western Balkan countries have recorded annual public investment rates averaging over 6% of GDP, ranging from 3% of GDP in Serbia to over 8% of GDP in Bosnia and Herzegovina and Kosovo.