Albania: Economy Overview

03 February 2010
by Ina Dimireva -- last modified 03 February 2010

Albania, a formerly closed, centrally-planned state, is making the difficult transition to a more modern open-market economy. Macroeconomic growth averaged around 6% between 2004-08, but declined to about 2% in 2009. Inflation is low and stable.

Economy Overview

The government has taken measures to curb violent crime, and recently adopted a fiscal reform package aimed at reducing the large gray economy and attracting foreign investment. The economy is bolstered by annual remittances from abroad representing about 15% of GDP, mostly from Albanians residing in Greece and Italy; this helps offset the towering trade deficit. The agricultural sector, which accounts for over half of employment but only about one-fifth of GDP, is limited primarily to small family operations and subsistence farming because of lack of modern equipment, unclear property rights, and the prevalence of small, inefficient plots of land. Energy shortages because of a reliance on hydropower, and antiquated and inadequate infrastructure contribute to Albania's poor business environment and lack of success in attracting new foreign investment needed to expand the country's export base. The completion of a new thermal power plant near Vlore has helped diversify generation capacity, and plans to upgrade transmission lines between Albania and Montenegro and Kosovo would help relieve the energy shortages. Also, with help from EU funds, the government is taking steps to improve the poor national road and rail network, a long-standing barrier to sustained economic growth.

GDP (purchasing power parity):

$22.59 billion (2009 est.)
country comparison to the world: 117
$22.13 billion (2008 est.)
$20.85 billion (2007 est.)
note: data are in 2009 US dollars
Albania has an informal, and unreported, sector that may be as large as 50% of official GDP.

GDP (official exchange rate):

$11.73 billion (2009 est.)

GDP - real growth rate:

2.1% (2009 est.)
country comparison to the world: 81
6.1% (2008 est.)
6% (2007 est.)

GDP - per capita (PPP):

$6,200 (2009 est.)
country comparison to the world: 131
$6,100 (2008 est.)
$5,800 (2007 est.)
note: data are in 2009 US dollars

GDP - composition by sector:

agriculture: 20.6%
industry: 18.8%
services: 60.6% (2009 est.)

Labor force:

1.103 million (not including 352,000 emigrant workers) (2009 est.)
country comparison to the world: 140

Labor force - by occupation:

agriculture: 58%
industry: 15%
services: 27% (September 2006 est.)

Unemployment rate:

12% (2009 est.)
country comparison to the world: 36
12.5% (2008 est.)
note: these are official rates, but actual rates may exceed 30% due to preponderance of near-subsistence farming

Investment (gross fixed):

23.7 of GDP (2009 est.)
country comparison to the world: 50

Budget:

revenues: $3.46 billion
expenditures: $4.099 billion (2009 est.)

Inflation rate (consumer prices):

21% (2009 est.)
country comparison to the world: 68
3.4% (2008 est.)

Commercial bank prime lending rate:

13.02% (31 December 2008)
country comparison to the world: 52
41.1% (31 September 2007)

Stock of domestic credit:

$8.176 billion (31 December 2008)
country comparison to the world: 75
$7.247 billion (31 December 2007)

Agriculture - products:

wheat, corn, potatoes, vegetables, fruits, sugar beets, grapes; meat, dairy products

Industries:

food processing, textiles and clothing; lumber, oil, cement, chemicals, mining, basic metals, hydropower

Industrial production growth rate:

-4% (2009 est.)
country comparison to the world: 125

Oil - production:

5,985 bbl/day (2008 est.)
country comparison to the world: 93

Natural gas - production:

0 cu m (2008 est.)
country comparison to the world: 206

Current account balance:

$-1.195 billion (2009 est.)
country comparison to the world: 136
$-1.906 billion (2008 est.)

Exports:

$1.194 billion (2009 est.)
country comparison to the world: 143
$1.345 billion (2008 est.)

Exports - commodities:

textiles and footwear; asphalt, metals and metallic ores, crude oil; vegetables, fruits, tobacco

Exports - partners:

Italy 55.9%, Greece 11.6%, China 7.2% (2008)

Imports:

$3.602 billion (2009 est.)
country comparison to the world: 129
$4.898 billion (2008 est.)

Imports - commodities:

machinery and equipment, foodstuffs, textiles, chemicals

Imports - partners:

Italy 32.2%, Greece 13.1%, Turkey 7.2%, Germany 6.6%, China 4.5%, Russia 4.4% (2008)

Debt - external:

$1.55 billion (2004 est.)
country comparison to the world: 138

Exchange rates:

leke (ALL) per US dollar - 93.928 (2009), 79.546 (2008), 92.668 (2007), 98.384 (2006), 102.649 (2005)

Source: CIA - The World Factbook