Economy - overview:
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, the negative effects of the crisis caused a significant economic slowdown. Since 2014, Albania’s economy has steadily improved and economic growth reached 3.8% in 2017. However, close trade, remittance, and banking sector ties with Greece and Italy make Albania vulnerable to spillover effects of possible 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 5.8% of GDP in 2015, mostly from Albanians residing in Greece and Italy. The agricultural sector, which accounts for more than 40% of employment but less than one quarter 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. Since 2015, Albania has launched an ambitious program to increase tax compliance and bring more businesses into the formal economy. In July 2016, Albania passed constitutional amendments reforming the judicial system in order to strengthen the rule of law and to reduce deeply entrenched corruption.
Albania’s electricity supply is uneven despite upgraded transmission capacities with neighboring countries. However, the government has recently taken steps to stem non-technical losses and has begun to upgrade the distribution grid. Better enforcement of electricity contracts has improved the financial viability of the sector, decreasing its reliance on budget support. Also, with help from international donors, the government is taking steps to improve the poor road and rail networks, 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 three-year IMF program, an extended fund facility arrangement, was successfully concluded in February 2017. The Albanian Government has strengthened tax collection amid moderate public wage and pension increases in an effort to reduce its budget deficit. The country continues to face high public debt, exceeding its former statutory limit of 60% of GDP in 2013 and reaching 72% in 2016.
GDP (purchasing power parity):
$35.87 billion (2017 est.)
$34.59 billion (2016 est.)
$33.46 billion (2015 est.)
note: data are in 2017 dollars
unreported output may be as large as 50% of official GDP
country comparison to the world: 126
GDP (official exchange rate):
$13 billion (2017 est.)
GDP - real growth rate:
3.7% (2017 est.)
3.4% (2016 est.)
2.2% (2015 est.)
country comparison to the world: 85
GDP - per capita (PPP):
$12,500 (2017 est.)
$12,000 (2016 est.)
$11,600 (2015 est.)
note: data are in 2017 dollars
country comparison to the world: 122
Gross national saving:
15.6% of GDP (2017 est.)
15.9% of GDP (2016 est.)
16.3% of GDP (2015 est.)
country comparison to the world: 122
GDP - composition, by end use:
household consumption: 77.6%
government consumption: 10.9%
investment in fixed capital: 27%
investment in inventories: 0%
exports of goods and services: 29.7%
imports of goods and services: -45.2% (2017 est.)
GDP - composition, by sector of origin:
agriculture: 22.6%
industry: 23.8%
services: 53.7%
(2017 est.)
Agriculture - products:
wheat, corn, potatoes, vegetables, fruits, olives and olive oil, grapes; meat, dairy products; sheep and goats
Industries:
food; footwear, apparel and clothing; lumber, oil, cement, chemicals, mining, basic metals, hydropower
Industrial production growth rate:
3.5% (2017 est.)
country comparison to the world: 83
Labor force:
1.407 million (2017 est.)
country comparison to the world: 135
Labor force - by occupation:
agriculture: 41.8%
industry: 11.4%
services: 46.8% (2017 est.)
Unemployment rate:
14% (2017 est.)
15.2% (2016 est.)
note: these official rates may not include those working at near-subsistence farming
country comparison to the world: 170
Population below poverty line:
14.3% (2012 est.)
Household income or consumption by percentage share:
lowest 10%: 4.1%
highest 10%: 19.6% (2015 est.)
Distribution of family income - Gini index:
29 (2012 est.)
30 (2008 est.)
country comparison to the world: 136
Budget:
revenues: $3.486 billion
expenditures: $3.765 billion (2017 est.)
Taxes and other revenues:
26.8% of GDP (2017 est.)
country comparison to the world: 105
Budget surplus (+) or deficit (-):
-2.1% of GDP (2017 est.)
country comparison to the world: 88
Public debt:
71.3% of GDP (2017 est.)
72% of GDP (2016 est.)
country comparison to the world: 50
Fiscal year:
calendar year
Inflation rate (consumer prices):
2.1% (2017 est.)
1.3% (2016 est.)
country comparison to the world: 98
Central bank discount rate:
1.25% (31 December 2017 est.)
1.75% (31 December 2016 est.)
country comparison to the world: 125
Commercial bank prime lending rate:
7.2% (31 December 2017 est.)
9.65% (31 December 2016 est.)
country comparison to the world: 117
Stock of narrow money:
$3.979 billion (31 December 2017 est.)
$3.397 billion (31 December 2016 est.)
country comparison to the world: 112
Stock of broad money:
$6.665 billion (31 December 2017 est.)
$5.75 billion (31 December 2016 est.)
country comparison to the world: 122
Stock of domestic credit:
$8.147 billion (31 December 2017 est.)
$7.065 billion (31 December 2016 est.)
country comparison to the world: 114
Market value of publicly traded shares:
$NA
Current account balance:
$-1.201 billion (2017 est.)
$-899 million (2016 est.)
country comparison to the world: 139
Exports:
$960.9 million (2017 est.)
$789.1 million (2016 est.)
country comparison to the world: 159
Exports - commodities:
apparel and clothing, footwear; asphalt, metals and metallic ores, crude oil; cement and construction materials, vegetables, fruits, tobacco
Exports - partners:
Italy 50.5%, Serbia 8.1%, Kosovo 7.5%, Greece 4.2% (2016)
Imports:
$4.084 billion (2017 est.)
$3.671 billion (2016 est.)
country comparison to the world: 132
Imports - commodities:
machinery and equipment, foodstuffs, textiles, chemicals
Imports - partners:
Italy 29%, Germany 9.4%, China 8.7%, Greece 7.8%, Turkey 7.8%, Serbia 4.1% (2016)
Reserves of foreign exchange and gold:
$3.274 billion (31 December 2017 est.)
$3.109 billion (31 December 2016 est.)
country comparison to the world: 102
Debt - external:
$8.579 billion (31 December 2017 est.)
$8.421 billion (31 December 2016 est.)
country comparison to the world: 120
Stock of direct foreign investment - at home:
$6.056 billion (31 December 2016 est.)
$5.459 billion (31 December 2015 est.)
country comparison to the world: 102
Exchange rates:
leke (ALL) per US dollar -
121.9 (2017 est.)
124.14 (2016 est.)
124.14 (2015 est.)
125.96 (2014 est.)
105.48 (2013 est.)