Albania flag Albania: Economic outline

Economic Outline

Economic Indicators

For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

Albania is a transition economy, not highly integrated into global capital flows but showing strong economical performances. The country has been impacted by the difficulties of the Eurozone, which is the destination of almost 80% of its exports and the largest investor in the country. The Albanian economy has maintained positive momentum despite the repercussions of Russia’s invasion of Ukraine and grew an estimated 4% in 2022 (IMF) fuelled by robust activity in the tourism, real estate, and services sectors. Considering the difficult situation of partner economies and reflecting tighter financial conditions, the IMF projects growth at 2.5% this year and 3.2% in 2024, although uncertainty remains high at the global level.

The impact of the COVID-19 pandemic on the economy, the budget deficit and the public debt ratio were lower than expected, but fiscal space remains limited. According to IMF data, public debt represented 70.3% of GDP in 2022 and is expected to narrow to 68.5% by 2024 helped by continued economic growth. The budget deficit was estimated at 3.3% of GDP in 2022, with the 2023 fiscal budget projecting a deficit of 2.6% in GDP (when the primary balance should return positive, at 0.2% of GDP). Revenue-related reforms progressed, but investment expenditure remains weak. Inflation jumped to 6.2% in 2022 and is expected to decelerate in 2023 (4.3%) before returning to the central bank’s target of 3% by mid-2024 (IMF), as international commodity prices stabilize, fiscal and monetary policies tighten, and growth slows.

After the peaks reached during the COVID-19 pandemic, the unemployment rate resumed its downward path and was estimated at 10.3% in 2022 by the IMF. Over the forecast horizon, it is projected to hover around 10%. Albania remains one of the poorest countries in Europe (with a GDP per capita PPP of USD 17,858 in 2022 - IMF). Although the situation improved in the two last decades, Albania still has the largest poverty headcount in the Western Balkans (around 37% of the population as per the World Bank's latest figures). Increased public service digitalisation, financial inclusion, and labour inspections benefitted the business environment and the formalisation of the economy, but a large share of GDP (estimated at around 50%) is still accounted for by the informal economy, which hinders the economic reform agenda. After several years of procrastination, Albania finally began official accession talks with the European Union in July 2022.

 
Main Indicators 20222023 (E)2024 (E)2025 (E)2026 (E)
GDP (billions USD) 19.0823.0325.3026.3627.80
GDP (Constant Prices, Annual % Change) 4.83.63.33.43.5
GDP per Capita (USD) 6,6588,0578,8779,2819,819
General Government Gross Debt (in % of GDP) 65.562.964.259.760.3
Inflation Rate (%) n/a4.84.03.23.0
Unemployment Rate (% of the Labour Force) 11.111.011.011.011.0
Current Account (billions USD) -1.14-1.37-1.49-1.54-1.61
Current Account (in % of GDP) -6.0-6.0-5.9-5.8-5.8

Source: IMF – World Economic Outlook Database, 2016

Note: (e) Estimated Data

 
Monetary Indicators 20162017201820192020
Albanian Lek (ALL) - Average Annual Exchange Rate For 1 GHS 31.1127.3823.5521.1319.42

Source: World Bank, 2015

 

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Latest Update: February 2024