Albania was the last central and eastern European country to adopt free-market reforms. Even though the country's economy has improved during the last few years, Albania still remains one of the poorest countries in Europe. In 2014, one in seven inhabitant still lives below the poverty threshold and nearly 50% of the GDP is made up by the informal economy, a fact which has hindered the current economic reform program.
However, with its solvent and well-capitalized banking, in 2009 and 2010 Albania resisted the global crisis better than its Balkan neighbours, due to its still limited international openness and the development of global prices of raw materials. The country has escaped the recession during the years of crisis, although the fall in activity in the EU and the neighbouring countries of Southeastern Europe weighed heavily on the economy. Greece is a major trading partner and investor, as well as a provider of remittances from the diaspora and its economic difficulties since 2011 have been felt strongly in Albania.
The current government is pursuing a program focused on the fight against corruption, organized crime and trafficking, and the implementing of liberal reforms designed to prepare Albania for future EU membership and able to attract foreign investors.
To the extent that Albania is a country only moderately integrated into global capital flows, the impact of the international situation has been less dramatic than in other countries of Eastern Europe. The country grew only by 1.7% in 2013 (after only 0.5% in 2012). The economy is burdened by a debt of more than 60% of GDP in 2013, exports at half mast and a significant drop in remittances from Albanian migrants living abroad. Albania's economic results are linked to the recession in the eurozone, an area receiving over 80% of its export.
The development of the country in the coming years could also be helped by the expectations of an official application for accession to the European Union.
In 2014, the Albanian economy remains fragile and dependent on outside institutional assistance.
|Main Indicators||2011||2012||2013||2014||2015 (e)|
|GDP (billions USD)||12.68||12.17||12.72||13.59e||14.52|
|GDP (Constant Prices, Annual % Change)||2.3||1.1e||0.4||2.1||3.3|
|GDP per Capita (USD)||4,460e||4,321e||4||4,900e||5,261|
|General Government Gross Debt (in % of GDP)||60.4||62.9||70.5||72.1||71.6|
|Inflation Rate (%)||3.4||2.0||1.9e||1.8e||2.7|
|Unemployment Rate (% of the Labor Force)||14.0||13.4||15.6||14.0||13.5|
|Current Account (billions USD)||-1.69||-1.22e||-1.32e||-1.50e||-1.85|
|Current Account (in % of GDP)||-13.3||-10.0e||-10.4||-11.0e||-12.7|
Source: IMF - World Economic Outlook Database , Last Available Data
Note: (e) Estimated Data
The share of agriculture in the GDP is 17.5%. The sector employs 42.9% of the active population. Agricultural production is concentrated on wheat, corn, oats, sorghum, cotton, potatoes, vegetables, the olive, tobacco, fruits, beet sugar, vines, livestock farming and dairy products. Agriculture suffers from the lack of modern equipment, ownership and land parceling problems, all of which lead to a relatively low productivity. It has to be noted that agricultural production is higher than its share in the GDP. As a matter of fact, a large part of the produce is consumed by the farmers themselves and, therefore, it is not sold.
In 2013, the industrial sector accounted for 15.3% of the country's GDP and employed 23.9% of the active population. The sector is concentrated on food processing, textiles and clothing, timber work (construction), oil, cement, chemical products, mining, transport and hydraulic energy.
The services sector represented 67.2% of the GDP in 2013, employing a third of the active population (33.2% in 2012). Tourism, telephony, the banking and insurance sectors are in full expansion.
During the last past years, the share of income from the agricultural and industrial sectors has been falling progressively. In parallel, the part of the services sector is increasing each year and the sector has been a key driver of the Albanian economy.
The sectors of telecommunications, energy, minerals and medical equipment are expected to develop in the following years and they offer good opportunities.
|Breakdown of Economic Activity By Sector||Agriculture||Industry||Services|
|Employment By Sector (in % of Total Employment)||41.5||20.8||37.7|
|Value Added (in % of GDP)||22.2||15.3||62.5|
|Value Added (Annual % Change)||0.7||8.8||-2.2|
Source: World Bank - Last Available Data.
|Albanian Lek (ALL) - Average Annual Exchange Rate For 1 USD||94.98||103.94||100.89||108.18||105.67|
Source: World Bank - Last Available Data.
The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labor freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.
Albania is focused on imports. In these recent years, imports have registered a growth of more than 25%. The main import goods are high value-added products such as machinery and equipment, metals, vehicles and means of transport. Albania's main suppliers are Italy (over 28% of total imports in 2013), Greece and China (over 10%%) and then Turkey (5%). The country mainly exports mineral ores (over 15% of the total exports), as well as textile products and shoes, metal, crude oil, vegetables, fruits and tobacco.
Albania's main customers are Italy (over 50% of export), Turkey, Kosovo and Greece. In 2013, the European Union remained Albania's main trading partner, representing more than 65% of Albanian imports and 70% of Albanian exports. The country has a structural trade deficit. The increase in imports is due to the rise of international prices in certain goods and electricity. Additionally, exports are neither sufficiently diversified nor competitive in terms of prices. Furthermore, the economic crisis has had an impact on exports, which experienced a sharp drop after 2008 since Albania's commercial partners, also affected by the crisis, have reduced their demand for Albanian products.
The worsening position of Albania's key trading partners (Italy and Greece in particular) should continue to have a negative impact on the country's trade balance in 2014.
|Foreign Trade Indicators||2009||2010||2011||2012||2013|
|Imports of Goods (million USD)||4,550||4,406||5,396||4,882||4,855|
|Exports of Goods (million USD)||1,091||1,545||1,951||1,968||2,331|
|Imports of Services (million USD)||2,215||1,990||2,235||1,861||2,085|
|Exports of Services (million USD)||2,348||2,256||2,398||2,069||1,998|
|Imports of Goods and Services (Annual % Change)||-||5.4||6.1||-6.6||2.7|
|Exports of Goods and Services (Annual % Change)||-||0.6||7.4||-0.6||6.1|
|Imports of Goods and Services (in % of GDP)||53.8||53.0||56.7||51.9||52.9|
|Exports of Goods and Services (in % of GDP)||29.6||32.4||34.0||33.3||35.1|
|Trade Balance (million USD)||-3,392||-3,038||-3,499||-2,859||-2,518|
|Trade Balance (Including Service) (million USD)||-2,967||-2,458||-2,933||-2,297||-2,310|
|Foreign Trade (in % of GDP)||83.4||85.5||90.8||85.2||87.9|
Source: WTO - World Trade Organization ; World Bank , Last Available Data
(% of Exports)
|See More Countries||25.0%|
(% of Imports)
|See More Countries||39.1%|
Source: Comtrade, Last Available Data
|- bn USD of products exported in 2013|
|Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals, crude||28.2%|
|Footwear with outer soles of rubber, plastics,...Footwear with outer soles of rubber, plastics, leather or composition leather and uppers of leather (excl. orthopaedic footwear, skating boots with ice or roller skates attached, and toy footwear)||6.7%|
|Parts of footwear, incl. uppers whether or not...Parts of footwear, incl. uppers whether or not attached to soles other than outer soles; removable in-soles, heel cushions and similar articles; gaiters, leggings and similar articles, and parts thereof (excl. articles of asbestos)||5.7%|
|Bars and rods, of iron or non-alloy steel, not...Bars and rods, of iron or non-alloy steel, not further worked than forged, hot-rolled, hot-drawn or hot-extruded, but incl. those twisted after rolling (excl. in irregularly wound coils)||5.3%|
|Chromium ores and concentratesChromium ores and concentrates||3.9%|
|See More Products||50.2%|
|- bn USD of products imported in 2013|
|Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals (excl. crude); preparations containing >= 70% by weight of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, n.e.s.; waste oils containing mainly petroleum or bituminous minerals||12.9%|
|Motor cars and other motor vehicles principally...Motor cars and other motor vehicles principally designed for the transport of persons, incl. station wagons and racing cars (excl. motor vehicles of heading 8702)||3.9%|
|Medicaments consisting of mixed or unmixed...Medicaments consisting of mixed or unmixed products for therapeutic or prophylactic uses, put up in measured doses incl. those in the form of transdermal administration or in forms or packings for retail sale (excl. goods of heading 3002, 3005 or 3006)||2.8%|
|Electrical energyElectrical energy||2.2%|
|Cigars, cheroots, cigarillos and cigarettes of...Cigars, cheroots, cigarillos and cigarettes of tobacco or of tobacco substitutes||1.7%|
|See More Products||76.5%|
Source: Comtrade, Last Available Data
|- bn USD of services exported in 2011|
|Personal travelPersonal travel||50.86%|
|Health-related expenditureHealth-related expenditure||1.47%|
|Education-related expenditureEducation-related expenditure||0.64%|
|Business travelBusiness travel||16.13%|
|Expenditure by seasonal and...Expenditure by seasonal and border workers||2.04%|
|Air transportAir transport||6.74%|
|Sea transportSea transport||4.25%|
|Road transportRoad transport||1.67%|
|Rail transportRail transport||0.12%|
|Miscellaneous business,...Miscellaneous business, professional, and technical services||7.70%|
|Other business servicesOther business services||3.04%|
|Legal, accounting, management...Legal, accounting, management consulting, and public relations||1.68%|
|Business and management...Business and management consulting and public relations services||0.64%|
|Legal servicesLegal services||0.53%|
|Accounting, auditing,...Accounting, auditing, bookkeeping, and tax consulting services||0.52%|
|Architectural, engineering,...Architectural, engineering, and other technical services||1.30%|
|Advertising, market research,...Advertising, market research, and public opinion polling||0.87%|
|Agricultural, mining, and...Agricultural, mining, and on-site processing services||0.70%|
|Waste treatment and...Waste treatment and depollution||0.01%|
|Research and developmentResearch and development||0.09%|
|Services between related...Services between related enterprises, n.i.e.||0.02%|
|Merchanting and other trade-related...Merchanting and other trade-related services||0.06%|
|Operational leasing servicesOperational leasing services||0.03%|
|Telecommunications servicesTelecommunications services||3.90%|
|Postal and courier servicesPostal and courier services||0.36%|
|Construction in the compiling...Construction in the compiling economy||3.48%|
|Other personal, cultural, and...Other personal, cultural, and recreational services||1.21%|
|Health servicesHealth services||0.15%|
|Education servicesEducation services||0.14%|
|Audiovisual and related servicesAudiovisual and related services||0.06%|
|Embassies and consulatesEmbassies and consulates||1.41%|
|Military units and agenciesMilitary units and agencies||0.14%|
|Franchises and similar rightsFranchises and similar rights||0.53%|
|Computer servicesComputer services||0.36%|
|Information servicesInformation services||0.18%|
|News agency servicesNews agency services||0.17%|
|Other information provision...Other information provision services||0.01%|
|Other direct insuranceOther direct insurance||0.12%|
|Auxiliary servicesAuxiliary services||0.04%|
|- bn USD of services imported in 2011|
|Personal travelPersonal travel||50.01%|
|Health-related expenditureHealth-related expenditure||4.99%|
|Education-related expenditureEducation-related expenditure||1.98%|
|Business travelBusiness travel||19.58%|
|Expenditure by seasonal and...Expenditure by seasonal and border workers||6.46%|
|Sea transportSea transport||7.33%|
|Road transportRoad transport||4.72%|
|Air transportAir transport||4.59%|
|Rail transportRail transport||0.33%|
|Freight insuranceFreight insurance||3.79%|
|Other direct insuranceOther direct insurance||0.25%|
|Life insurance and pension fundingLife insurance and pension funding||0.01%|
|Other personal, cultural, and...Other personal, cultural, and recreational services||2.19%|
|Education servicesEducation services||0.22%|
|Health servicesHealth services||0.07%|
|Audiovisual and related servicesAudiovisual and related services||0.05%|
|Embassies and consulatesEmbassies and consulates||0.38%|
|Military units and agenciesMilitary units and agencies||0.01%|
|Telecommunications servicesTelecommunications services||2.19%|
|Postal and courier servicesPostal and courier services||0.04%|
|Miscellaneous business,...Miscellaneous business, professional, and technical services||2.09%|
|Legal, accounting, management...Legal, accounting, management consulting, and public relations||0.95%|
|Accounting, auditing,...Accounting, auditing, bookkeeping, and tax consulting services||0.66%|
|Business and management...Business and management consulting and public relations services||0.21%|
|Legal servicesLegal services||0.08%|
|Advertising, market research,...Advertising, market research, and public opinion polling||0.81%|
|Architectural, engineering,...Architectural, engineering, and other technical services||0.25%|
|Research and developmentResearch and development||0.06%|
|Other business servicesOther business services||0.02%|
|Services between related...Services between related enterprises, n.i.e.||0.01%|
|Operational leasing servicesOperational leasing services||0.07%|
|Computer servicesComputer services||0.71%|
|Information servicesInformation services||0.06%|
|Other information provision...Other information provision services||0.03%|
|News agency servicesNews agency services||0.03%|
|Franchises and similar rightsFranchises and similar rights||0.37%|
|Construction in the compiling...Construction in the compiling economy||0.17%|
Source: Comtrade, Last Available Data
The world rankings, published annually, measures the violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire sent to partner organizations,150 RWB correspondents, journalists, researchers, jurists and activists of human rights, including the main criteria - 44 in total - to assess the situation of press freedom in a given country. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).
The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.
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