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flag Albania Albania: Economic and Political Outline

Economic Indicators | Foreign Trade in Figures | Sources of General Economic Information | Political Outline

Economic Indicators

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, with an estimated GDP per capita of around USD 4,000 in 2008. Therefore, nearly 20% of the population still lives below the poverty threshold.  More than 50% of the GDP is made up by the informal economy, a fact which has hindered the current economic reform program.  In addition, the country is very dependent on remittances from Albanians working abroad, mainly in Greece and Italy.  Despite a slight inflation increase in 2008, the rate is relatively stable and it has remained at about 3%.

The signing of the Stabilization and Association Agreement with the European Union, on June 12, 2006, represents a significant development for Albania's partnership with European countries. The current government is pursuing a program focused on the struggle against corruption, organized crime and trafficking; and it is establishing liberal-inspired reforms aimed at preparing Albania for a future membership to the EU and at attracting foreign investors.

Since Albania is moderately integrated in the global capital flows, the impact of the economic crisis was less spectacular than in other countries of Eastern Europe.  Despite this, the economy was not prosperous in 2008, its debt was doubled, exports were half of their usual and there was a significant decline on the remittances from the Albanians living abroad.

Despite the financial crisis, the country's GDP made progress in 2009 attaining 3%, and  2% in 2010, which was mainly due to the healthy condition of the construction and services sectors.  The development of the country in the next following years could equally be benefited by the perspective of an official candidature to become a member of the European Union.  According the Albanian government, the country should revive with a growth of more than 5% in 2011.

 
Main Indicators 2009201020112012 (e)2013 (e)
GDP (billions USD) 12.1711.90e13.29e14.2215.11
GDP (Constant Prices, Annual % Change) 3.33.5e2.53.54.2
GDP per Capita (USD) 3,819e3,7164,1314,3964,650
General Government Gross Debt (in % of GDP) 59.858.259.4e59.259.6
Inflation Rate (%) 2.23.6e3.9e3.52.9
Unemployment Rate (% of the Labor Force) 13.112.511.511.010.5
Current Account (billions USD) -1.65-1.40e-1.45e-1.39-1.38
Current Account (in % of GDP) -13.5-11.8e-10.9-9.2-

Source: IMF - World Economic Outlook Database ; World Bank , Last Available Data

Note: (e) Estimated Data

Main Sectors of Industry

The share of agriculture in the GDP is about 20%. The sector employs almost 60% 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.

The industrial sector accounts for about 20% of the country's GDP and employs 15% 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 represents close to 60% of the GDP and employs a fourth of the active population. 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 a parallel direction, the share from the services sector is increasing each year and the Albanian economy has been led notably by the dynamism of the services sector (tourism, telephony, banking and insurance).

The sectors of telecommunications, energy, minerals and medical equipment are expected to develop in the next following years and they offer good opportunities.

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 58.0 13.5 28.4
Value Added (in % of GDP) 20.5 19.6 59.9
Value Added (Annual % Change) 2.6 7.0 7.0

Source: World Bank - Last Available Data.

 
 
Monetary Indicators 20062007200820092010
Albanian Lek (ALL) - Average Annual Exchange Rate For 1 USD 98.1090.4383.8994.98103.94

Source: World Bank - Last Available Data.

 
 
Learn more about Market Analysis about Albania on Globaltrade.net, the Directory for International Trade Services.
 

Indicator of Economic Freedom

Score:
64.0/100
Position:
Moderately free
World Rank:
66/179
Regional Rank:
31/42

Distribution of Economic freedom in the world
Source: 2011 Index of Economic freedom, Heritage Foundation

 

Country Risk

See the Country Risk Analysis Provided By Ducroire.

 

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Foreign Trade in Figures

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 (14.5% of total imports), metals, vehicles and means of transport (6.7% of imports). Albania's main suppliers are Italy, Greece, Turkey and Germany. The country mainly exports mineral ores (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, Greece, China, Serbia and Montenegro. The European Union provides 40% of Albanian imports and accounts for 80% of Albanian exports.

The trade deficit reached 29% of the GDP in 2007.  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 drop of 15% in 2008, this decrease has continued in 2009 and 2010 since Albania's commercial partners, also affected by the crisis, have reduced their demand for Albanian products.

 
Foreign Trade Indicators 20062007200820092010
Imports of Goods (million USD) 3,0584,1885,2514,5504,601
Exports of Goods (million USD) 7981,0781,3551,0911,550
Imports of Services (million USD) 1,5521,8932,3612,2151,893
Exports of Services (million USD) 1,4811,9242,4202,3482,109
Imports of Goods and Services (Annual % Change) 7.828.221.1-12.0-9.1
Exports of Goods and Services (Annual % Change) 5.27.77.15.94.2
Imports of Goods and Services (in % of GDP) 49.255.056.154.251.4
Exports of Goods and Services (in % of GDP) 25.128.829.528.629.7
Trade Balance (million USD) -2,123-2,900-3,552-3,216-2,757
Trade Balance (Including Service) (million USD) -2,204-2,880-3,453-2,965-2,525
Foreign Trade (in % of GDP) 74.283.785.682.881.1

Source: WTO - World Trade Organization ; World Bank , Last Available Data

 

Main Partner Countries

Main Customers
(% of Exports)
2010
Italy 50.8%
Serbia 8.3%
Turkey 6.0%
China 5.5%
Greece 5.4%
See More Countries 24.0%
Main Suppliers
(% of Imports)
2010
Italy 28.2%
Greece 13.1%
China 6.3%
Turkey 5.7%
Germany 5.6%
See More Countries 41.1%

Source: Comtrade, Last Available Data

 

Main Products

Main Exports
(% of Exports)
2010
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals, crude 10.5%
Electrical energyElectrical energy 6.5%
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) 6.2%
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) 6.1%
Chromium ores and concentratesChromium ores and concentrates 5.0%
See More Products 65.7%
Main Imports
(% of Imports)
2010
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 8.8%
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) 3.1%
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) 2.9%
Electrical energyElectrical energy 2.5%
Ferrous waste and scrap; remelting scrap ingots of...Ferrous waste and scrap; remelting scrap ingots of iron or steel (excl. slag, scale and other waste from the production of iron or steel; radioactive waste and scrap; fragments of pigs, blocks or other primary forms of pig iron or spiegeleisen) 2.2%
See More Products 80.5%

Source: Comtrade, Last Available Data

 
See More Products
More imports (Intracen Data)
More exports (Intracen Data)
 

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Sources of General Economic Information

Ministries
Ministry of the Economy
Chamber of Commerce and Industry
Agency for Economic Development
Statistical Office
National Institute of Statistics
Central Bank
Central Bank
Stock Exchange
Tirana Stock Exchange
Search Engines
Google
Albafind
Dmoz
Economic Portals
Website for economic news
Albanian Trade Center

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Political Outline

Executive Power
The President is the head of state and elected by a three-fifths majority vote of all Assembly members for a 5 year term. Although the position is largely ceremonial, the Constitution does give the President authority to appoint and dismiss some civil servants in the executive and judicial branches. The Prime Minister is the head of the government and holds the executive powers. The Prime Minister is appointed by the President and approved by a simple majority of all members of the Assembly. The Prime Minister nominates the Council of Ministers which must be approved by the President.
Legislative Power
The legislature in Albania is unicameral. The parliament, called People's Assembly, consists of 140 seats, out of which 100 are elected by direct popular vote and the remaining 40 seats are distributed by proportional representation. All members serve 4-year terms. Albanians enjoy limited political rights.
Main Political Parties
A number of political parties operate within the country, but the most important political parties are: the PD (Democratic Party) and the PS (Socialist Party). Albanian society remains very much clan-based. In general, the PD commands the allegiance of the Gheg clans located in the North of the country while the PS has the support of the Tosk clans located in the South. The Greek minority is mostly represented through the PBDNj ( Party of the Union for Human Rights). Muslim leaders were prevented from registering a party called Motherland in 2004 because religiously or ethnically based parties are illegal in Albania.
Current Political Leaders
President: Bamir TOPI (since July 2007) - Democratic party
Prime Minister: Sali BERISHA (since September 2005) - PD
Next Election Dates
Presidential election: 2012
 

Indicator of Freedom of the Press

World Rank:
80/178
Evolution:
8 places up compared to 2009

Source: Worldwide Press Freedom Index 2010, Reporters Without Borders

 

Indicator of Political Freedom

Ranking:
Partly Free
Political Freedom:
3/7
Civil Liberties:
3/7

Map of freedom 2010
Source: Freedom House

 

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Last Updates: January 2012