Albania Economy Facts
Economical overview
When the Communist regime fell in 1991, Albania was one of Europe’s poorest countries. The isolation from the outside world had made the country far behind other eastern states. The transition from plan to market economy was rapid in the 1990s, but political unrest contributed to major disruptions in the economy. After the turn of the millennium, however, the country was able to rise from absolute poverty.
The World Bank today counts Albania as a middle-income country. During the first decade of the 2000s, GDP per inhabitant increased substantially, while growth has since leveled out. In particular, the service sector has grown significantly, in particular the tourism industry, the retail trade and the hotel and restaurant industry.
- Countryaah.com: Major imports by Albania, covering a full list of top products imported by the country and trade value for each product category.
One reason why income from the service sector has increased sharply is that a larger part of trade and small business is now reported to the authorities. This means a larger tax levy, which benefits the public economy. The informal sector has previously been estimated to correspond to up to half of GDP. The proportion has probably decreased as tax collection has improved, but exact data are naturally difficult to obtain.
Increased mining has also contributed to the economic upswing, while agriculture’s share of GDP has fallen to just under a fifth. The sector is of greatest importance for the labor market, as almost half of the jobs are in agriculture. The industry that largely collapsed in the 1990s has begun to recover and accounted for a quarter of GDP in the mid-2010s . In addition to the mining industry, the manufacture of footwear and clothing, which is largely exported to the EU, is most important.
- Abbreviationfinder.org: Check this abbreviation website to find three letter ISO codes for all countries in the world, including ALB which represents the country of Albania. Check findjobdescriptions to learn more about Albania.
A shaky 2010 figure
Assistance from abroad has been important since the beginning of the 1990s. The efforts of the IMF, the World Bank and the EU, as well as from individual western countries, have focused mainly on privatization, inflation and poverty reduction and infrastructure investments. Money sent home by Albanians abroad also makes an important contribution to the economy. At the same time, the influx to a certain extent means that fewer new jobs are created in the home country.
The international recession from 2009 led to a slowdown in the Albanian economy. The crisis in the eurozone caused developments to almost stop in 2012. Most figures turned downwards, both for trade and for home money from Albanians abroad. However, Albania managed to avoid a regular depression (economic downturn with negative growth) and then the trend turned upwards again.
Challenges remain
At the beginning of 2014, the IMF expressed concern over Albania’s continued growing government debt and rising budget deficits. To get the budget in balance, the government agreed in February to raise a number of taxes in exchange for a three-year IMF loan of EUR 331 million.
In 2015, the returned money from Albanians abroad increased (mainly Greece and Italy). At the same time, the country was praised by the World Bank for an improved business and investment climate. The government had eased the regulations and increased the availability of credit. It had become easier to start a business and the corporation tax had been reduced considerably. The largest investors are Greece and Canada.
Nevertheless, lack of investment is a problem for the Albanian economy. The large organized crime discourages investors and means that the state is still losing out on large tax revenues, even though tax revenues have increased.
The widespread corruption in society as a whole is another financial challenge. The European Development Bank (EBRD), like the EU, has also complained about political instability and a weak judiciary that is unable to fight economic crime.
FACTS – FINANCE
GDP per person
US $ 5,254 (2018)
Total GDP
US $ 15,059 million (2018)
GDP growth
4.0 percent (2018)
Agriculture’s share of GDP
18.4 percent (2018)
Manufacturing industry’s share of GDP
6.2 percent (2018)
The service sector’s share of GDP
47.9 percent (2018)
Inflation
1.8 percent (2019)
Government debt’s share of GDP
69.9 percent (2018)
External debt
US $ 9,115 million (2017)
Currency
play
Merchandise exports
US $ 1,164 million (2018)
Imports
US $ 4,545 million (2018)
Current account
– US $ 1,008 million (2018)
Commodity trade’s share of GDP
59 percent (2018)
Main export goods
clothing, shoes, building materials, metal, fossil fuels, electricity, food
Largest trading partner
Italy, Greece, China, Germany, Turkey
2007
July
PD leader becomes president
The ruling PD’s chairman Bamir Topi is elected as the country’s president. Four votes are needed in Parliament before a new head of state can be appointed.
June
President Bush visits
Albania is visited by US President George W Bush, who is received as a hero of the people. The visit clearly shows how the previously isolated communist state has been transformed into a close ally of the United States.
February
The ruling PD backs in the local elections
The Conservative Government Party The Democratic Party (PD) is losing big in local elections. The opposition Socialist Party (PS) prevails in all major cities except Shkodas.
