The economy of Albania is a developing mixed economy. It is one of the poorest countries in Europe, but it has made significant progress in recent years due to economic reforms, international aid, and foreign investment. The country’s GDP has grown steadily since 2014 and its economy is expected to continue to grow in the coming years.
According to cheeroutdoor, agriculture is an important sector of Albania’s economy, accounting for around 17% of the country’s GDP. The main crops are wheat, corn, potatoes, tomatoes, grapes, olives and tobacco. Livestock farming also plays an important role in the economy with sheep and goats being the most common animals raised. Fishing is also a major industry with many Albanians making their living from fishing on the Adriatic Sea.
Industry accounts for around 25% of Albania’s GDP and includes mining operations such as copper and chromite production as well as manufacturing activities such as textiles and furniture production. Tourism is another significant sector which has seen rapid growth over recent years due to improved infrastructure links within the country as well as increased interest from foreign tourists visiting Albania’s beaches along its stunning coastline.
Albania’s economic development relies heavily on foreign aid from organizations such as the World Bank which provides loans for infrastructure projects such as road construction or power plants. In addition, foreign investment into sectors such as mining or tourism has helped stimulate economic growth in recent years by creating employment opportunities or increasing disposable incomes of Albanian households through taxation revenues generated by these industries.
Albania’s economy has improved significantly in recent years and growth rates have surpassed many other countries in the region. However, the country is still considered one of the poorest in Europe. Growth during the 1990s has been mainly in the service and service industries as well as trade; now services and services contribute about 55 per cent of GDP. One industry that has grown a lot is the tourism industry, mainly tourists from neighboring countries visiting Albania. During the 1990s, the authorities have also succeeded to some extent in reducing the unofficial economy and thus increased tax revenues.
Although the importance of agriculture to the economy has diminished, its share of GDP is still high, measured by European dimensions, and almost half the labor force is employed in the industry. The country’s industry is of less importance to the economy.
After most of the post-war period being characterized by central planning and also for very European self-sustaining policies, with low production and productivity levels as a result of eastern European conditions, the economic reforms in the early 1990s meant a dramatic turnaround in many respects. Through a drastic austerity policy implemented in parallel with far-reaching liberalization of the economy, attempts were made to deal with high inflation, rapidly falling production and rising unemployment. Private property was allowed, business privatization began and the currency reformed. Subsidies to state-owned enterprises were cut or ceased altogether. Trade with the outside world was opened and foreign direct investment was made possible. Initially, it led to further unemployment, But by the end of 1993, the situation had stabilized, and the years that followed were characterized by high economic growth and increased employment, not least made possible by a rapidly increasing inflow of foreign capital. The positive trend was reversed in contrast with the fact that a number of fast-growing funds, many of which functioned according to the chain letter principle rather than the investment companies they claimed to be, collapsed around the turn of the year 1996-97. Then followed a few years of economic and political chaos.
The country’s economy recovered at the beginning of the 1990s and Albania resumed its integration work with the rest of Europe. In 2009, Albania joined NATO and at the same time an application for EU membership was submitted.
Farming and livestock management are traditionally important to the Albanian economy. In total, there are close to 700,000 ha of usable land, including large and terraced areas in the post-war and post-war years.
The crops grown are primarily wheat, maize and potatoes as well as tomatoes and other vegetables. Sugar beets, olives, grapes, citrus fruits and other fruits are other common features. The cultivation of forage crops is important, although many rely on natural grazing for their animals. Animal husbandry is primarily based on cattle, sheep and goats, but poultry and pigs are also kept.
Agriculture, collectivized during the 1950s, has been privatized since the fall of communism by dividing the collective land between the former members. In their places, however, in violation of the law, they have chosen to return the land to the previous owners, whether it was defined as the holding before or after the land reform in 1946. In many cases, the collective property of the collective was abolished or destroyed before the decollectivization could be formally initiated. The same applies to the former state farms, which in many cases, however, have been converted into companies rather than cut up.
Agricultural production was disturbed by the dramatic changes in the early 1990s, but has slowly recovered. The possibilities of obtaining a reasonable income as a farmer vary greatly within the country. The way in which the land was distributed led to regions with the average largest families receiving the average smallest farms, sometimes no more than just over half a hectare per farming unit. It is also these areas, and especially the highlands in the north, that are most clearly exposed to depopulation. In contrast, households that have received land in the vicinity of the big cities have, over time, come to be able to benefit from increased demand for their products.
About 40 percent of the country’s area is estimated to be covered by forest. However, its economic potential is often limited due to the country’s topography and neglected forest management. The significance of the assets is local rather than national. The stock is primarily used for statutes and timber for sawmills.
The fishing is mainly coastal, and Albania’s fishing fleet has access to ports on both the Adriatic and the Ionian Sea. This is also where most of the fish processing industry is located. Lake fishing is mainly conducted in Lake Ohrid, but smaller lakes, streams and ponds are used extensively for house-based fishing. During the 1990s, fish farming has become increasingly important in economic terms.
Mining and metallurgy are built around rich mineral deposits, mainly chromium and copper. Before the fall of the central planning, production encountered major difficulties, among other things in the form of low productivity, worn-out production equipment and obsolete technology, and a lack of new breakthrough discoveries. Since the end of the 1990s, all mining has been run under private management and the majority have foreign owners.
The deposits of chromium are concentrated to the city of Bulqizë and the districts of Martanesh, Tropojë and Kukës. Copper deposits are found in Kukës, Pukë and Mirditë. Cobalt is also mined, as are minor amounts of many other metals, while the extraction of iron ore and nickel in Librazhd and Pogradec has periodically ceased completely since 1990.
Since the 1930s, oil has been mined in the plain south of the Shkumbin River. The production has at least periodically covered Albania’s needs and given room for export. During the late 1990s, oil production declined, but has increased again during the 1990s. The oil industry is considered to have great potential. Concessions for oil recovery along the coast have been granted to foreign companies. Natural gas, which is partly found in the same areas as the oil, is also extracted, as is lignite. In addition, Albania has significant potential for extraction of water, which accounts for 98 percent of the country’s electricity production. The power plants are concentrated on the rivers Drin, Mat and Bistricë.
Albania’s industrial sector is small, but has experienced strong growth during the 1990s. From being mainly focused on exploiting the rich domestic deposits of oil and ore, supplemented by a limited production of consumer goods for the everyday needs of the population, the reforms of the 1990s led to a focus on exports of simple industrial products.
After a decline around the turn of the 2000s, the mining and food industry was rebuilt during the 1990s. The textile, clothing and leather industry, as well as the construction industry, also experienced an upswing in the 1990s.
From being regulated by a state monopoly, foreign trade is now free. Half of Albania’s exports consist of textiles and shoes. The country also exports copper and chrome, among other things. Imports mainly consist of vehicles, machinery and food. Italy is Albania’s most important trading partner. Foreign trade has consistently shown deficits since the fall of central planning, often of considerable size.
- COUNTRYAAH: Find major trading partners of Albania, including major exports and major imports with latest trade value and market share as well as growth rate.
Tourism and gastronomy
Since 1990, the number of foreign tourists has increased from 30,000 visitors to 4.6 million (2017). The majority of tourists consist of Albanians who come from neighboring countries. Among other visitors, many come from Poland and the Czech Republic (mainly ski tourism) as well as Germany, France and the Nordic countries.
Note: the capital city of Albania is Tirana with a population of 407,000 (2009 estimate). Other major cities include Durres with a population of 133,000, Elbasan with a population of 107,000, Shkodra with a population of 91,000, Vlora with a population of 95,000 (2009 estimate).
Many tourists go to seaside resorts along the Adriatic and Ionian seas. The main sights are the Roman amphitheater in Durrës, one of the largest in Europe, as well as the Roman remains in Apollonia (north of Vlorë) and Butrint (in the southernmost part, opposite Corfu).
Abbreviated as ALB by abbreviationfinder.org, Albania is a poor country, which also characterizes the people’s eating habits. Two of the countries that have occupied Albania at different times have influenced the cuisine: Turkey and Italy. Grilled lamb skewers are common, as are the lamb roasts cooked in paper or later in plastic. Strong soups and stews are popular, as is mesa, which is cold meat with vegetables, mutton and eggs. A national dish that qofte is reminiscent of the shape and texture of meatballs. The cheeses are iced on sheep’s milk. Yogurt is common. In the town of Gjirokastër, which is considered to be the country’s culinary center, is served as dessert oaf, dried figs, baked in sheep’s milk.