At 70 percent of the EU 27 average, “food and non-alcoholic beverages” in Albania are higher even compared to some EU members such as Romania, Poland, and Bulgaria, according to Eurostat
TIRANA, June 25 – While Albania’s purchasing power stands at less than one-third of the EU 27 average, price levels for consumer goods and services are estimated at 51 percent, showing that the cost of living in Albania is relatively high compared to the small income. A recently released report by Eurostat, the statistical office of the European Union, shows Albania’s total score at 51 percent of the EU 27 average in 2011 is higher than Macedonia’s 45 percent and on par to Bulgaria, both of which have a GDP per capita expressed in purchasing power standards 5 to 14 percent higher than Albania.
Detailed Eurostat data show Albania’s “food and non-alcoholic beverages” which are the key contributors to the Consumer Price Index are priced at 70 percent of the EU 27 average. At 70 percent of the EU 27 average, “food and non-alcoholic beverages” in Albania are higher even compared to some EU members such as Romania, Poland, and Bulgaria. Neighbouring Macedonia’s price levels in this group stand at 51 percent.
Clothing prices also stand at 72 percent of the EU 27 average.
Albania’s highest price levels are reported in the “consumer electronics” and “personal transport equipment” which stand at 108% and 98% of the EU average, respectively.
The lowest price levels are found in the “restaurants and hotels” and “alcoholic beverages and tobacco” groups which stand at 42% and 50% of the EU 27 average.
The overall price levels included in the Eurostat report relate to the concept of household final consumption expenditure, which consists of all expenditure incurred by households on goods and services for consumption, including also rents for housing.
In 2011, price levels for consumer goods and services differed widely across member states. Denmark (142% of the EU27 average) had the highest price level, followed by Sweden (128%), Finland (125%) and Luxembourg (122%).
Compared to 2010, Albania’s total price level has increased by only 1 percent, the same to the GDP per capita in purchasing power.
The latest Eurostat report shows Albania’s GDP per capita expressed in purchasing power standards (PPS) in 2011 slightly recovered to 31 percent of the EU 27 but ranked second from bottom in a 37 country list. Data show Albania’s GDP per capita in PPS ranks better only compared to also potential EU candidate Bosnia and Herzegovina’s 29 percent, remaining at less than one-third of the EU 27 average. Compared to the four EU candidate countries – Serbia, Macedonia, Montenegro, and Turkey – Albania’s PPS stands 4 to 21 percent below.
Meanwhile, Actual Individual Consumption per capita, an alternative welfare indicator, better adapted to reflect the situation of households, shows Albania ranks worst in the 37-country list with 34 percent of the EU 27 average compared to Bosnia’s 35 percent.
The Eurostat report covers 27 EU Member States, three EFTA countries, one acceding state, four candidate countries and two potential candidate countries.
Cost of living
As the crisis in the Eurozone escalates with less remittances and FDI for Albanians, sources of income for thousands of households have dropped while the cost of living is on the rise.
With official unemployment rate at 13.3 percent, the minimum monthly wage at 20,000 lek (Euro 145) and the average state and village pensions at 12,000 lek and 6,650 lek respectively, ordinary Albanians are finding it more and more difficult to make ends meet. Average monthly wages stand at Euro 300. INSTAT data show food and non-alcoholic beverages accounted for around 45 percent of monthly expenditure for an average family of four back in 2006 and 2007.
Data also show food and non-alcoholic beverage prices have grown by 17.4 percent from 2006 to 2011. Within this group, bread and cereal prices, which make up 15.5 percent of a household’s monthly expenditure, have risen by 50 percent during the past six years.
Regional Gaps of income
A recent regional accounts report, the first of this kind published by INSTAT, has revealed the huge gaps of income and welfare across Albania’s 12 administrative regions. The report shows that in 2009 the region of Tirana, where 25 percent of the country’s 3.2 million population lives, accounted for 37.9 percent of the Gross Domestic Product while the GDP per capita was 51.2 percent above the country’s average. “Some of the main factors are the concentration of gross value added of the construction branch, the concentration of services sector (banking, insurance, and telecommunications), high compe-nsation of employees and high rate of commuting from other prefectures,” said the report. Tirana’s GDP per capita in 2009 was at 4,126 Euros, 2.2 times higher than the GDP per capita of the northeastern region of Dibra, the country’s poorest. Second came the region of Durres with a GDP per capita of 2,566 Euros, accounting for 94 percent of Albania’s 2,728 Euros per capita. The report also reveals the gaps between central Albania (the regions of Tirana and Elbasan) and northern and southern Albania where GDP per capita differs by 1,500 Euros per inhabitant.
