Albania Economy

By: EconomyWatch Content   Date: 9 March 2010

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Located in the South Eastern Europe, Albania has a small coastline to the west and south west. It is less than 72kms from Italy and is known for its rich flora and fauna.

Albania has a structural problem with its economy. Although it is rich in natural deposits (as it has rich deposits of petroleum, natural gas, coal, bauxite, iron ore and copper), stagnation, crime and corruption mean that badly needed foreign investment is not flowing into the country.

Without that investment, resources cannot be exploited and Albania will remain one of the poorest countries in Europe. It is quite possibly Europe's only third world country.

Albania’s GDP in 2010 shrank 2.6 percent to US$ 11.578 billion down from US$ 12.185 billion in 2009. In 2011, Albania’s GDP is expected to grow 3.67 percent to US$ 12.003 billion and up to US$ 15.64 billion by 2015.

Albania’s population as of 2010 was 3.202 million, with 23.1 percent aged 0-14 years. 67.1 percent aged 15-64 and 9.8 percent aged 65 and over with 12.5 percent of the population unemployed. 58 percent of employment in Albania is generated through agriculture, although agricultural only contributes 20.6 percent of GDP - 15 percent of labor is contributed by industries and 27 percent in services.

Albania has a labor force of 1.103 million, 352,000 of which are emigrant workers, according to the 2010 estimates.

Albania’s unemployment rate in 2010 was 12.5 percent, expected to drop to 11.50  percent in 2011 and further to 10.5  percent by 2015. 

Albania’s agriculture contributed 20.6 percent to the country’s GDP in 2010, services accounted for 60.6 percent and industries a mere 18.8 percent. Industries employ almost 15 percent of the labor force.

However, Albania does posses a youthful workforce with an average age of 28 years in 2010. The latest economic reforms are targeted at improving the bleak economy by attracting foreign investment.

Albania has rich deposits of fossil fuels and precious metals that can turn its trade deficit around however, the country’s industry sector suffers from the unavailability of modern machinery to extract and exploit their natural resources, hence the need for foreign investment.

While Albania undergoes major macroeconomic transformation, substantial improvement has been seen in the economy since 2004. The country remains among the poorest in the world however. Approximately 12.4 percent of the population lives below the poverty line, a reduction from the 25.4 percent level seen in 2002.

The country’s budget in 2010 indicated government revenues of $3.46 billion, investments exceeding $4.099 billion and public debt soaring ti 54.9 percent of the GDP, even as inflation remains low at 2.1 percent.

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