TIRANA, June 13 – Albania’s level of economic activity and household material welfare continue to remain one of Europe’s poorest, unveiling growth in the Albanian economy has to sharply pick up in order catch up with its regional competitors.
The GDP per capita, a measure of economic activity remained unchanged at 30 percent of the EU average for the third year in a row in 2016, according to a report by Eurostat, the statistical office of the European Union.
In other regional EU aspirant countries, GDP per capita expressed in purchasing power standards (PPS), an artificial currency unit that eliminates price level differences between countries, ranged from 31 percent of the EU average in Bosnia and Herzegovina to 36 percent in Serbia, 38 percent in Macedonia and 42 percent in Montenegro.
Albania’s actual individual consumption (AIC), a measure of households’ material welfare, slightly rose by 1 percentage point to 39 percent of the EU average in 2016 as the country’s economy picked up to about 3.5 percent, one of the highest growth rates in the past eight years following a pre-crisis decade of 6 percent annually. Experts estimate the Albanian economy has to grow above 6 percent annually in order to produce welfare for households.
At 39 percent of the EU average, actual individual consumption also ranks Albania poorest in a 37-country list which includes 28 EU member states, three EFTA members, five EU candidate countries and one potential candidate.
Albania’s GDP per capita and actual individual consumption are apparently higher only compared to neighboring Kosovo and Moldova, Europe’s two poorest countries not covered by the Eurostat report.
Meanwhile, Albania has one of Europe’s lowest price levels at 43 percent of the EU 28 average, higher only compared to neighboring Macedonia’s 42 percent of the EU average.
Data shows Albania’s price levels rose by 2 percentage points to 43 percent of the EU average in 2016 as international oil and food prices picked up. When compared to disposable income, price levels, especially food one, are too high for the average Albanian. The situation is a result of high level of imports and VAT being applied at an undifferentiated 20 percent even on basic food.
“Food and non-alcoholic beverages” takes the majority 44.3 percent of households budgets, a survey by Albania’s state statistical institute has shown.
Albania’s GDP of about Euro 11 billion is lower only compared to that of Serbia and Bosnia and Herzegovina among the six EU aspirant Western Balkans countries.
