CIA world fact book on Albania

TIRANA, Feb. 11 – The CIA Fact Book’s listing on Albania has a special section devoted to the country’s economy. Albania’s economic progress is documented as are suggestions of what Albania should continue to do to become fully integrated into the world market economy. Energy supplies and poor infrastructure seem to be the main areas Tirana should focus on, according to the Fact Book. Lagging behind its Balkan neighbors, Albania is making the difficult transition to a more modern open-market economy, said the report. The government has taken measures to curb violent crime, and recently adopted a fiscal reform package aimed at reducing the large gray economy and attracting foreign investment.
The economy is bolstered by annual remittances of $600-$800 million from abroad, mostly from Albanians residing in Greece and Italy, which helps offset the towering trade deficit.
Agriculture, which accounts for more than one-fifth of the country’s GDP, lags because of lack of modern equipment, unclear property rights, and the prevalence of small, inefficient plots of land. Energy shortages and antiquated and inadequate infrastructure contribute to Albania’s poor business environment, which make it difficult to attract and sustain foreign investment. The completion of a new thermal power plant near Vlore and improved transmission line between Albania and Montenegro will help relieve energy shortages.
Also, the government is moving slowly to improve the poor national road and rail network, a long-standing barrier to sustained economic growth. The Fact Book noted that macroeconomic growth was strong in 2003-07 and inflation remains low and stable.
Albania has a large gray economy that may be as large as 50 percent of official GDP, according to the report referring to the 2007 estimate. Agriculture makes up 21.7 percent of the GDP with 58 percent of the working force employed in this sector; industry is 20.3 percent and employs 15 percent of the work force; and the service sector accounts for 58 percent of the GDP while employing 27 percent of the work force.
Unemployment is 13 percent at the official rate but may exceed 30 percent due to preponderance of near-subsistence farming. Annual inflation is three percent.
The report also says that one-fourth of the population lives below the poverty line.