Economy of Albania
| File:Pjeter Bogdani banknote.jpg 1000 Lek note | |
| Currency | Lek (ALL) |
|---|---|
| Calendar year | |
Trade organisations | WTO |
| Statistics | |
| GDP | $19.818 billion note: Albania has a large gray economy that may be as large as 50% of official GDP (2007 est.) |
GDP growth | 6.0% (2007 est.) |
GDP per capita | $6,136.754 (2007 est. IMF) |
GDP by sector | agriculture: 23.2%, industry: 18.8%, services: 57.9% (2005 est.) |
| 2% (2005 est.) | |
Population below poverty line | 18.5% (2005 est.) |
Labour force | 1.08 million (2005 est.) |
Labour force by occupation | Agriculture 50%, Non-agricultural private sector 20%, Public sector 15.9% (2005 est.) |
| Unemployment | 13.9% (2006 est.) |
Main industries | Food processing, textiles and clothing; lumber, oil, cement, chemicals, mining, basic metals, hydropower |
| External | |
| Exports | $658.1 million f.o.b. (2005 est.) |
Export goods | textiles and footwear; asphalt, metals and metallic ores, crude oil; vegetables, fruits, tobacco |
Main export partners | Italy: 72.4%, Greece: 10.5%, Serbia and Montenegro: 5% (2005) |
| Imports | $2.622 billion f.o.b. (2005 est.) |
Import goods | machinery and equipment, foodstuffs, textiles, chemicals, etc. |
Main import partners | Italy: 29.3%, Greece: 16.4%, Turkey: 7.5%, China: 6.6%, Germany: 5.4%, Russia: 4% (2005) |
| Public finances | |
| external: $1.55 billion (2004) | |
| Revenues | $1.96 billion (2005) |
| Expenses | $2.377 billion; including capital expenditures of $500 million (2005) |
| Economic aid | recipient: ODA: $366 million (top donors were Italy, EU, Germany) (2003 est.) |
All values, unless otherwise stated, are in US dollars. | |
A poor country by West European standards, Albania is making the difficult transition to a more open-market economy. It is lagging behind its neighbors. The collapse of communism in Albania came later and was more chaotic than in other east European countries and was marked by a mass exodus of refugees to Italy and Greece in 1991 and 1992. Attempts at reform began in earnest in early 1992 after real GDP fell by more than 50% from its peak in 1989.
The democratically elected government that assumed office in April 1992 launched an ambitious economic reform program to halt economic deterioration and put the country on the path toward a market economy. Key elements included price and exchange system liberalization, fiscal consolidation, monetary restraint, and a firm income policy. These were complemented by a comprehensive package of structural reforms including privatization, enterprise, and financial sector reform, and creation of the legal framework for a market economy and private sector activity. Most agriculture, state housing, and small industry were privatized. This trend continued with the privatization of transport, services, and small and medium-sized enterprises. In 1995, the government began privatizing large state enterprises. After reaching a low point in the early 1990s, the economy slowly expanded again, reaching its 1989 level by the end of the decade. current GDP per capita
Macro-economic trend
This is a chart of trend of gross domestic product of Albania in Albanian currency and at Purchasing Power Parity (PPP--i.e., taking inflation into account) estimated by the International Monetary Fund with figures in billions of Lekes respectively.
| Year | Gross Domestic Product | US Dollar Exchange | Inflation Index (2000=100) |
|---|---|---|---|
| 1980 | 17,411 | 9.49 Lekes | 5.10 |
| 1985 | 18,896 | 8.58 Lekes | 5.10 |
| 1990 | 18,840 | 9.01 Lekes | 5.10 |
| 1995 | 251,843 | 92.79 Lekes | 55 |
| 2000 | 530,906 | 143.68 Lekes | 100 |
| 2005 | 986,833 | 100.19 Lekes | 121 |
For purchasing power parity comparisons, the US Dollar is exchanged at 44.11 Lekes only.
Results of Albania's efforts were initially encouraging. Led by the agricultural sector, real GDP grew by an estimated 11% in 1993, 8% in 1994, and more than 8% in 1995, with most of this growth in the private sector. Annual inflation dropped from 25% in 1991 to single-digit numbers. The Albanian currency, the lek, stabilized. Albania became less dependent on food aid. The speed and vigor of private entrepreneurial response to Albania's opening and liberalizing was better than expected. Beginning in 1995, however, progress stalled, with negligible GDP growth in 1996 and a 9% contraction in 1997. A weakening of government resolve to maintain stabilization policies in the election year of 1996 contributed to renewal of inflationary pressures, spurred by the budget deficit which exceeded 12%. Inflation approached 20% in 1996 and 50% in 1997. The collapse of financial pyramid schemes in early 1997 - which had attracted deposits from a substantial portion of Albania's population - triggered severe social unrest which led to more than 1,500 deaths, widespread destruction of property, and an 8% drop in GDP. The lek initially lost up to half of its value during the 1997 crisis, before rebounding to its January 1998 level of 143 to the dollar. The new government, installed in July 1997, has taken strong measures to restore public order and to revive economic activity and trade.
Albania is currently undergoing an intensive macroeconomic restructuring regime with the International Monetary Fund and World Bank. The need for reform is profound, encompassing all sectors of the economy. In 2004, the largest commercial bank in Albania -the then Savings Bank of Albania- was privatised and sold to Raiffeisen Bank of Austria for US$ 124 million. [1]
External trade
However, reforms are constrained by limited administrative capacity and low-income levels, which make the population particularly vulnerable to unemployment, price fluctuation, and other variables that negatively affect income. The economy continues to be bolstered by remittances of some 20% of the labor force that works abroad, mostly in Greece and Italy. These remittances supplement GDP and help offset the large foreign trade deficit. Most agricultural land was privatized in 1992, substantially improving peasant incomes. In 1998, Albania recovered the 8% drop in GDP of 1997 and pushed ahead by 7% in 1999. International aid has helped defray the high costs of receiving and returning refugees from the Kosovo conflict. Largescale investment from outside is still hampered by poor infrastructure; lack of a fully functional banking system; untested or incompletely developed investment, tax, and contract laws; and an enduring mentality that discourages initiative.
Other statistics
Industrial Production Growth Rate: 3.1% (2004 est.)
Electricity - Production: 5.434 TWh (2004)
Electricity - production by source:
- fossil fuel: 2.9%
- hydro: 97.1%
- other: 0%
- nuclear: 0% (2001)
Electricity
- Consumption: 5.231 TWh (2004)
- Exports: 0.390 TWh (2004)
- Imports: 0.567 TWh (2004 est.)
Oil
- production: 3,600 barrel/day (946 m³/d) 2005
- consumption: 25,200 barrel/day (3,560 m³/d) 2005
- exports: NA (2001)
- imports: 21,600 barrel/day (3,560 m³/d) 2005 est.
- proved reserves: 185.5 million barrel (29,490,000 m³) (1 January 2002(
Natural gas
- production: 30 million m³ (2003 est.)
- consumption: 30 million m³ (2003 est.)
- exports: 0 cu m (2001 est.)
- imports: 0 cu m (2001 est.)
- proved reserves: 2.832 km³ (1 January 2002)
Agriculture
- Products: wheat, maize, potatoes, vegetables, fruits, sugar beets, grapes; meat, dairy products
Exchange Rates
- Lekë per US dollar - 121.863 (2003), 140.155 (2002), 143.485 (2001), 143.709 (2000), 137.691 (1999)
References
- From 2006,
This article incorporates public domain material from The World Factbook. CIA. - From 2003, This article incorporates public domain material from U.S. Bilateral Relations Fact Sheets. United States Department of State.
- From 2007, Template:International Monetary Fund
See also
External links
- Albic Business Web Portal in Albania
- Bank of Albania (official site)
- U.S. Department of Energy - Country Report on Albania
