Economy Overview
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 3% in 2009-11, and 0.5% in 2012. Inflation is low and stable. 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. Remittances, a significant catalyst for economic growth declined from 12-15% of GDP before the 2008 financial crisis to 8% of GDP in 2010, mostly from Albanians residing in Greece and Italy. The agricultural sector, which accounts for almost 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 - 98% of the electrical power produced in Albania - 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. FDI is among the lowest in the region, but the government has embarked on an ambitious program to improve the business climate through fiscal and legislative reforms. 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. The country will continue to face challenges from increasing public debt, having slightly exceeded its former statutory limit of 60% of GDP in 2012. Strong trade, remittance, and banking sector ties with Greece and Italy make Albania vulnerable to spillover effects of the global financial crisis.
Agriculture Products
wheat, corn, potatoes, vegetables, fruits, sugar beets, grapes, meat, dairy products; sheep
Industries
perfumes and cosmetic products, food and tobacco products, textiles and clothing; lumber, oil, cement, chemicals, mining, basic metals, hydropower
Industrial Production Growth Rate
5% (2012 est.)country comparison to the world: 57
Labor Force
1.098 million (2012 est.)country comparison to the world: 141
Unemployment Rate
13% (2012 est.)country comparison to the world: 132 13.4% (2011 est.) note: these are official rates, but actual rates may exceed 30% due to preponderance of near-subsistence farming
Population Below Poverty Line
12.5% (2008 est.)
Household Income or Consumption by Percentage Share
Lowest 10%: 3.5%
Highest 10%: 29% (2008)
Distribution of Family Income Gini Index
34.5 (2008)country comparison to the world: 89 26.7 (2005)
Budget
Revenues: $3.054 billion
Expenditures: $3.477 billion (2012 est.)
Public Debt
58.8% of GDP (2012 est.)country comparison to the world: 47 58.7% of GDP (2011 est.)
Central Bank Discount Rate
5% (31 December 2010 est.)country comparison to the world: 67 5.25% (31 December 2009 est.)
Commercial Bank Prime Lending Rate
Stock of Narrow Money
$2.657 billion (31 December 2012 est.)country comparison to the world: 119 $2.575 billion (31 December 2011 est.)
Stock of Broad Money
$9.951 billion (31 December 2011 est.)country comparison to the world: 107 $9.426 billion (31 December 2010 est.)
Stock of Domestic Credit
$8.591 billion (31 December 2012 est.)country comparison to the world: 104 $8.408 billion (31 December 2011 est.)
Market Value of Publicly Traded Shares
$NA
Reserves of Foreign Exchange and Gold
$2.6 billion (31 December 2012 est.)country comparison to the world: 113 $2.473 billion (31 December 2011 est.)
Debt External
$5.838 billion (31 December 2012 est.)country comparison to the world: 115 $5.938 billion (31 December 2011 est.)
Stock of Direct Foreign Investment at Home
Stock of Direct Foreign Investment Abroad
Exchange Rates
leke (ALL) per US dollar -108.19 (2012 est.) 100.9 (2011 est.) 103.94 (2010 est.) 94.98 (2009) 79.55 (2008)
