Economic situation The economy is picking up
Due to its close trade links with the EU, and especially with its neighbours Italy and Greece, the euro crisis had a temporary negative impact on the country’s economy. From 2008, there was a sharp drop in growth rates.
Since 2014, Albania’s economy has been recovering again; however, in 2020, the COVID-19 pandemic brought economic growth down by 4 per cent. The International Monetary Fund (IMF) has predicted rates of between three and four per cent again for the next few years.
As the rate of people leaving the country and the share of the informal sector in the economy continue to be high, the unemployment rate is difficult to estimate. According to government sources, it is almost 12 per cent. The share of young people who are neither in education or training nor hold a job is especially high – roughly 27 per cent.
The backbone of the Albanian economy is agriculture. While its share in gross domestic product has dropped to just under 20 per cent, it accounts for more than 40 per cent of all jobs. Most people in the sector are smallholders who are engaged in subsistence farming. The agricultural sector and the food industry could make a much stronger contribution towards economic development. To that end, however, rural infrastructure – such as roads, markets, water and energy supply – would need to be improved significantly. Agro-tourism has evolved positively in recent years, not least thanks to support from the BMZ.
The growth of Albania’s economy is driven mainly by the textile and leather industries, telecommunications and tourism. The country is one of the biodiversity hotspots in Europe. However, so far it has lacked both the political will and the financial and human resources to monitor and enforce compliance with existing environmental legislation.
As at: 22/06/2022