Economy of Albania
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Economy of Albania | |
Currency | Lek (ALL) |
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Fiscal year | Calendar year |
Trade organisations | WTO |
Statistics | |
GDP (PPP) | $21.5 billion (2008)[1] note: Albania has a large gray economy that may be as large as 50% of official GDP (2007 est.) |
GDP growth | 5.0% (2008) [2] |
GDP per capita | $5,500 (2008) [3] |
GDP by sector | agriculture: 23.2%, industry: 18.8%, services: 57.9% (2005 est.) |
Inflation (CPI) | 3% (2007) |
Population below poverty line |
18.5% (2005) [1] |
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 | 30% (2007) |
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 | |
Public Debt | 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.) |
Main data source: CIA World Fact Book All values, unless otherwise stated, are in US dollars |
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The Economy of Albania is poor-performing by Western European standards, but is making the difficult transition to a more open-market economy from its communist past.
Contents |
[edit] History
The collapse of communism in Albania came later and was more chaotic than in other Eastern European countries and was marked by a mass movement 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. Albania currently suffers from high organised crime and corruption rates, the highest in Europe. Reforms are taking place to fix that.[2]
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
[edit] Macro-economic trends
This is a chart of Gross Domestic Product (GDP) of Albania in national currency (million leks) and in US dollars based on Purchasing Power Parity (PPP) from estimates by the International Monetary Fund.[4]
Year | GDP, million leks |
GDP, million US$–PPP |
US$ exchange rate, leks/$ |
Inflation index (2000=100) |
---|---|---|---|---|
1980 | 17,411 | 4,836 | 9.49 | 5.10 |
1985 | 18,896 | 6,891 | 8.58 | 5.10 |
1990 | 18,840 | 8,233 | 9.01 | 5.10 |
1995 | 251,843 | 8,108 | 92.79 | 55 |
2000 | 530,906 | 11,483 | 143.68 | 100 |
2005 | 836,833 | 16,944 | 100.19 | 121 |
2007 | 982,179 | 19,818 | 103.34 | 124 |
For purchasing power parity comparisons, the US Dollar is exchanged at 49 leks (2007 estimate).[4] Average wages in 2007 hover around $16-19 per day.
Results of Albania's efforts were initially encouraging. Led by the agricultural sector, real GDP grew by an estimated 11% in 1993, 8% in 1994, and more than 8% in 1995, with most of this growth in the private sector. Annual inflation dropped from 25% in 1991 to single-digit numbers. The Albanian currency, the lek, stabilized. Albania became less dependent on food aid. The speed and vigour of private entrepreneurial response to Albania's opening and liberalizing was better than expected. Beginning in 1995, however, progress stalled, with negligible GDP growth in 1996 and a 9% contraction in 1997. A weakening of government resolve to maintain stabilization policies in the election year of 1996 contributed to renewal of inflationary pressures, spurred by the budget deficit which exceeded 12%. Inflation approached 20% in 1996 and 50% in 1997. The collapse of financial pyramid schemes in early 1997 - which had attracted deposits from a substantial portion of Albania's population - triggered severe social unrest which led to more than 1,500 deaths, widespread destruction of property, and an 8% drop in GDP. The lek initially lost up to half of its value during the 1997 crisis, before rebounding to its January 1998 level of 143 to the dollar. The new government, installed in July 1997, has taken strong measures to restore public order and to revive economic activity and trade.
Albania is currently undergoing an intensive macroeconomic restructuring regime with the International Monetary Fund and the World Bank. The need for reform is profound, encompassing all sectors of the economy. In 2004, the largest commercial bank in Albania—then the Savings Bank of Albania—was privatised and sold to Raiffeisen Bank of Austria for US$ 124 million.[5]
[edit] 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 labour 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. Large-scale 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.
[edit] Oil and gas
In early 2008, vast and untouched deposits of oil and gas were discovered in northern Albania. The deposits total 2.987 billion barrels of oil and 3.014 trillion cubic meters of natural gas. The announcement was made by the corporation Gustavson Associates LLC, engaged by Manas Petroleum Corporation, which has a contract with the Government of Albania to make explore the northern parts of the country for oil and gas deposits.[3]
[edit] Statistics
[edit] Macroeconomic indicators
GDP (PPP): $20.87 billion (2007)
GDP per capita: $5,800 (2007)
GDP growth: 6% (2007)
Inflation: 2.9% (2007)
Unemployment: officially 13.2%. The actual rate may exceed 30%.
[edit] Industry
Industrial production growth rate: 4% (2007 est.)
[edit] Agriculture
Products: wheat, maize, potatoes, vegetables, fruits, sugar beets, grapes; meat, dairy products
[edit] Foreign trade
Exports: $1.76 billion (2007 est.)
Imports: $3.999 billion (2007 est.)
Import partners: Italy 33.1%, Greece 18.1%, Turkey 8.7%, Germany 5.7% (2007)
Remittances: (from Italy, Greece and elsewhere) $800 million (2007 est.)
Current account balance: -$1.202 billion (2007 est.)
Foreign exchange reserves: $2.162 billion (2007)
[edit] Energy
Electricity - production: 5.385 TWh (2005)
Electricity - production by source:
- fossil fuel: 2.9%
- hydro: 97.1%
- other: 0%
- nuclear: 0% (2001)
Electricity
- Consumption: 3.323 TWh (2005)
- Exports: 0.300 TWh (2005)
- Imports: 0.371 TWh (2005 est.)
Oil
- production: 7,007 barrel/day (946 m³/d) 2005
- consumption: 29,000 barrel/day (3,560 m³/d) 2005
- exports: 1,420 (2005)
- imports: 21,600 barrel/day (3,560 m³/d) 2005 est.
- proved reserves: 198.1 million barrel (29,490,000 m³) (1 January 2006)
Natural gas
- production: 28.77 million m³ (2005 est.)
- consumption: 28.77 million m³ (2005 est.)
- exports: 0 cu m (2001 est.)
- imports: 0 cu m (2001 est.)
- proved reserves: 814.7 km³ (1 January 2006)
[edit] Exchange rates
- Lekë per US dollar: 92.668 (2007), 98.384 (2006), 102.649 (2005), 102.78 (2004), 121.863 (2003), 140.155 (2002), 143.485 (2001), 143.709 (2000), 137.691 (1999)
[edit] References
- ^ Albania: GDP statistics on IndexMundi.com
- ^ Albania: GDP real growth rate on IndexMundi.com
- ^ Albania: GDP per capita on IndexMundi.com
- ^ a b IMF online statistical database
- ^ Privatization of Savings Bank of Albania.
- From 2006, This article contains material from the CIA World Factbook which, as a U.S. government publication, is in the public domain.
- From 2003, This article contains material from the U.S. Department of State's Background Notes which, as a US government publication, is in the public domain.
- From 2007, International Monetary Fund
[edit] See also
[edit] External links
- Albic Business Web Portal in Albania
- Bank of Albania (official site)
- U.S. Department of Energy - Country Report on Albania
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