Albania: Economy#
Albania, a formerly closed, centrally-planned state, is a developing country with a modern open-market economy. Albania managed to weather the first waves of the global financial crisis but, more recently, the negative effects of the crisis have caused a significant economic slowdown. Close trade, remittance, and banking sector ties with Greece and Italy make Albania vulnerable to spillover effects of debt crises and weak growth in the euro zone.Remittances, a significant catalyst for economic growth, declined from 12-15% of GDP before the 2008 financial crisis to 5.7% of GDP in 2014, mostly from Albanians residing in Greece and Italy. The agricultural sector, which accounts for almost half of employment but only about one-fifth of GDP, is limited primarily to small family operations and subsistence farming, because of a lack of modern equipment, unclear property rights, and the prevalence of small, inefficient plots of land. Complex tax codes and licensing requirements, a weak judicial system, endemic corruption, poor enforcement of contracts and property issues, and antiquated infrastructure contribute to Albania's poor business environment making attracting foreign investment difficult.
Albania’s electricity supply is uneven despite upgraded transmission capacities with neighboring countries. Technical and non-technical losses in electricity - including theft and non-payment - continue to undermine the financial viability of the entire system, although the government has taken steps to stem non-technical losses and has begun to upgrade the distribution grid. Also, with help from international donors, the government is taking steps to improve the poor national road and rail network, a long standing barrier to sustained economic growth.
Inward FDI has increased significantly in recent years as the government has embarked on an ambitious program to improve the business climate through fiscal and legislative reforms. The government is focused on the simplification of licensing requirements and tax codes, and it entered into a new arrangement with the IMF for additional financial and technical support. Albania’s IMF program may be at risk, however, because the government has not collected sufficient tax revenue needed to reduce the budget deficit. The country continues to face increasing public debt, exceeding its former statutory limit of 60% of GDP in 2013 and reaching 73% in 2015.
Economic Facts#
| GDP (purchasing power parity) | $34.21 billion (2016 est.) $33.09 billion (2015 est.) $32.2 billion (2014 est.) note: data are in 2016 dollars ++ unreported output may be as large as 50% of official GDP |
|---|---|
| GDP (official exchange rate) | $12.14 billion (2015 est.) |
| GDP - real growth rate | 3.4% (2016 est.) 2.8% (2015 est.) 1.8% (2014 est.) |
| GDP - per capita (PPP) | $11,900 (2016 est.) $11,500 (2015 est.) $11,100 (2014 est.) note: data are in 2016 dollars |
| Gross national saving | 15.6% of GDP (2016 est.) 15% of GDP (2015 est.) 13% of GDP (2014 est.) |
| GDP - composition, by end use | household consumption: 85.7% government consumption: 10.4% investment in fixed capital: 27.6% investment in inventories: 1.5% exports of goods and services: 37.1% imports of goods and services: -62.3% (2016 est.) |
| GDP - composition, by sector of origin | agriculture: 21.6% industry: 14.9% services: 63.5% ++ (2016 est.) |
| Agriculture - products | wheat, corn, potatoes, vegetables, fruits, sugar beets, grapes; meat, dairy products; sheep |
| Industries | food and tobacco products; textiles and clothing; lumber, oil, cement, chemicals, mining, basic metals, hydropower |
| Industrial production growth rate | 2.9% (2016 est.) |
| Labor force | 1.179 million (2016 est.) |
| Labor force - by occupation | agriculture: 41.8% industry: 11.4% services: 46.8% (December 2014 est) |
| Unemployment rate | 17.3% (2015 est.) 17.5% (2014 est.) note: these official rates may not include those working at near-subsistence farming |
| Population below poverty line | 14.3% (2012 est.) |
| Household income or consumption by percentage share | lowest 10%: 4.1% highest 10%: 20.5% (2012) |
| Distribution of family income - Gini index | 29 (2012 est.) 30 (2008 est.) |
| Budget | revenues: $3.203 billion expenditures: $3.546 billion (2016 est.) |
| Taxes and other revenues | 26.4% of GDP (2016 est.) |
| Budget surplus (+) or deficit (-) | -2.8% of GDP (2016 est.) |
| Public debt | 71% of GDP (2016 est.) 71.4% of GDP (2015 est.) |
| Fiscal year | calendar year |
| Inflation rate (consumer prices) | 1.2% (2016 est.) 1.9% (2015 est.) |
| Central bank discount rate | 2.25% (31 December 2014) 3% (31 December 2013) |
| Commercial bank prime lending rate | 9.1% (31 December 2016 est.) 8.7% (31 December 2015 est.) |
| Stock of narrow money | $3.01 billion (31 December 2016 est.) $3.054 billion (31 December 2015 est.) |
| Stock of broad money | $5.588 billion (31 December 2016 est.) $5.756 billion (31 December 2015 est.) |
| Stock of domestic credit | $7.008 billion (31 December 2016 est.) $7.18 billion (31 December 2015 est.) |
| Market value of publicly traded shares | $NA |
| Current account balance | -$1.612 billion (2016 est.) -$1.281 billion (2015 est.) |
| Exports | $810.5 million (2016 est.) $854.7 million (2015 est.) |
| Exports - commodities | textiles, footwear; asphalt, metals and metallic ores, crude oil; vegetables, fruits, tobacco |
| Exports - partners | Italy 43.4%, Kosovo 9.8%, US 7.7%, China 6.2%, Greece 5.3%, Spain 4.8% (2015) |
| Imports | $3.613 billion (2016 est.) $3.402 billion (2015 est.) |
| Imports - commodities | machinery and equipment, foodstuffs, textiles, chemicals |
| Imports - partners | Italy 33.5%, China 10.1%, Greece 9%, Turkey 6.7%, Germany 5.2% (2015) |
| Reserves of foreign exchange and gold | $3.213 billion (31 December 2016 est.) $3.139 billion (31 December 2015 est.) |
| Debt - external | $7.797 billion (31 December 2016 est.) $7.716 billion (31 December 2015 est.) |
| Stock of direct foreign investment - at home | $5.557 billion (31 December 2013) $4.994 billion (31 December 2012) |
| Exchange rates | leke (ALL) per US dollar - 127.4 (2016 est.) 125.96 (2015 est.) 125.96 (2014 est.) 105.48 (2013 est.) 108.19 (2012 est.) |