The Social Economy Institute supports the strategic goal of Albania for full and equal accession in the European Union. By providing state-of-the-art expertise and tailored consultancy services to public and governmental organizations, enterprises, NGOs and international investors, the Social Economy Institute experts invest in an ambitious future for Albania.
"Albania is a middle-income country that has made enormous strides in establishing a credible, multi-party democracy and market economy over the last two and a half decades. Following graduation from the International Development Association (IDA) to the International Bank for Reconstruction and Development (IBRD) in 2008, Albania has generally been able to maintain positive growth rates and financial stability, despite the ongoing economic crisis.
Before the global financial crisis, Albania was one of the fastest-growing economies in Europe, enjoying average annual real growth rates of 6%, accompanied by rapid reductions in poverty. However, after 2008 average growth halved and macroeconomic imbalances in the public and external sectors emerged. The pace of growth was also mirrored in poverty and unemployment: between 2002 and 2008, poverty in the country fell by half (to about 12.4%) but in 2012 it increased again to 14.3%. Unemployment increased from 12.5% in 2008 to 17.3 % in the second quarter of 2015, with youth unemployment reaching 34.2 %.
The recovery to growth rates above 3% in 2011 moderated in 2012 and 2013, reflecting the deteriorating situation in the Eurozone and the difficult situation in the energy sector. Growth picked up to 2.1 % in 2014, led by an increase in consumption and private investments. A rebound is expected in 2015, but growth is also expected to stay below the country’s potential over the medium term.
Albania’s labor market has undergone some dramatic shifts over the last decade, contributing to productivity growth. Formal non-agricultural employment in the private sector more than doubled between 1999 and 2013, fueled largely by foreign investment. Emigration and urbanization brought a structural shift away from agriculture and toward industry and service, allowing the economy to begin producing a variety of services - ranging from banking to telecommunications and tourism.
Despite this shift, agriculture remains one of the largest and most important sectors in Albania. Agriculture is a main source of employment and income – especially in the country’s rural areas – and represents around 22% of GDP while accounting for about half of total employment. Albania’s agricultural sector continues to face a number of challenges, however, including small farm size and land fragmentation, poor infrastructure, market limitations, limited access to credit and grants, and inadequate rural institutions.
Looking toward the future, Albania is focused on supporting economic recovery and growth in a difficult external environment, broadening and sustaining the country’s social gains, and reducing vulnerability to climate change. Key challenges for Albania going forward include fiscal consolidation and strengthened public expenditure management, regulatory and institutional reform, reduction of infrastructure deficits, and improvement in the effectiveness of social protection systems and key health services".
Source: The World Bank
"Albania is a middle-income country that has made enormous strides in establishing a credible, multi-party democracy and market economy over the last two and a half decades. Following graduation from the International Development Association (IDA) to the International Bank for Reconstruction and Development (IBRD) in 2008, Albania has generally been able to maintain positive growth rates and financial stability, despite the ongoing economic crisis.
Before the global financial crisis, Albania was one of the fastest-growing economies in Europe, enjoying average annual real growth rates of 6%, accompanied by rapid reductions in poverty. However, after 2008 average growth halved and macroeconomic imbalances in the public and external sectors emerged. The pace of growth was also mirrored in poverty and unemployment: between 2002 and 2008, poverty in the country fell by half (to about 12.4%) but in 2012 it increased again to 14.3%. Unemployment increased from 12.5% in 2008 to 17.3 % in the second quarter of 2015, with youth unemployment reaching 34.2 %.
The recovery to growth rates above 3% in 2011 moderated in 2012 and 2013, reflecting the deteriorating situation in the Eurozone and the difficult situation in the energy sector. Growth picked up to 2.1 % in 2014, led by an increase in consumption and private investments. A rebound is expected in 2015, but growth is also expected to stay below the country’s potential over the medium term.
Albania’s labor market has undergone some dramatic shifts over the last decade, contributing to productivity growth. Formal non-agricultural employment in the private sector more than doubled between 1999 and 2013, fueled largely by foreign investment. Emigration and urbanization brought a structural shift away from agriculture and toward industry and service, allowing the economy to begin producing a variety of services - ranging from banking to telecommunications and tourism.
Despite this shift, agriculture remains one of the largest and most important sectors in Albania. Agriculture is a main source of employment and income – especially in the country’s rural areas – and represents around 22% of GDP while accounting for about half of total employment. Albania’s agricultural sector continues to face a number of challenges, however, including small farm size and land fragmentation, poor infrastructure, market limitations, limited access to credit and grants, and inadequate rural institutions.
Looking toward the future, Albania is focused on supporting economic recovery and growth in a difficult external environment, broadening and sustaining the country’s social gains, and reducing vulnerability to climate change. Key challenges for Albania going forward include fiscal consolidation and strengthened public expenditure management, regulatory and institutional reform, reduction of infrastructure deficits, and improvement in the effectiveness of social protection systems and key health services".
Source: The World Bank
