Foreign Aid and its Impact on the State Budget (Case: Albania 2008-2012)

Foreign aid comprises a very important element to the social and economic development of the country. It can be offered in various forms, financial, technical as well as donations in kind, namely, it can be allocated to a certain state in the form of grants or soft loans. The right to receive loans has been entitled to the governments, charity organizations, foundations, businesses and individuals. Loans have been considered decisive into aiding and promoting further development to countries suchlike Albania. The role of the foreign aid into the state consolidation process has long been a topic for discussion because of it implications. In spite of the donors’ good intentions the loan’s positive impact depends greatly on the ways it is managed by the recipient governments which should always apply it to the country’s priority sectors. However, it should be utterly accepted that loans are necessary for a state in its initial stepstowards development and international integration.Keywords: Foreign Aid, Grants, Soft Loans, Budgetary Support, Budgetary Deficit