TIRANA, July 31 – With commodity prices poorly recovering following the mid-2014 slump, the country’s two biggest regions of Tirana and Durres have emerged as the main contributors to Albania’s GDP growth, leaving oil reliant regions such as Fier with a negative contribution.
A regional GDP report published by state statistical institute, INSTAT, this week shows Tirana and Durres, the country’s two biggest regions, host to about 40 percent of the country’s 2.9 million resident population, contributed by 2.86 percentage points to the GDP growth in 2015 when the country’s economy recovered to 2.2 percent after growing between 1 to 1.7 percent in the previous three years.
The region of Tirana, which includes the Tirana and Kavaja districts, home to 862,000 residents and more than 53,000 active enterprises, contributed by 2.1 percentage points to the 2015 growth. The growth is mainly attributed to the construction, trade and financial services in Tirana, Albania’s capital city accounting for about 40 percent of the country’s GDP.
Back in 2014, when the Albanian economy grew by 1.77 percent Tirana also had the key contribution to the GDP growth with 1.22 percentage points.
However, 2013 was not the case. The southwestern region of Fier, mainly relying on oil production and agriculture, overtook Tirana in terms of contribution to GDP.
Fier, which is the country’s second’s largest region in terms of population and includes the districts of Fier, Lushnje and Mallakaster, had a 0.49 percent contribution to the GDP in 2013 when the Albanian economy grew by 1.1 percent.
The region of Fier is home to the Patos-Marinza oilfield, Europe’s largest onshore oil field where oil production peaked in 2013 ahead of the mid-2014 slump in international oil prices. Meanwhile, the district of Lushnja, part of the region or county of Fier, is known as the breadbasket of Albanian agriculture due its fertile lands and hard-working farmers. An oil refiner also operates in the Mallakastra district of the region of Fier.
International oil prices have recovered to about $50 a barrel this year, from a 12-year low of $30 a barrel in early 2016, but yet almost half of the peak level of more than $110 in mid-2014, considerably hitting oil production in Fier.
The 2015 contribution of Fier to the country’s GDP growth was at a negative 0.8 percent, down from 0.7 percent in 2014.
Meanwhile, Durres, the country’s third largest region in terms of population, had a 0.76 percentage point contribution to the 2015 GDP. Durres is home to the country’s largest port and mainly relies on tourism and trade.
About 80 percent of the country’s foreign companies, some 4,500 are based in Tirana and Durres.
The northern region of Dibra, mainly relying on mining and agriculture, but being one of the country’s most isolated and underdeveloped, had a 0.36 percentage point contribution to the 2015 GDP.
GDP contribution in the remaining regions ranged from -0.21 percent in Elbasan to -0.05 in Vlora and 0.18 percentage points in Shkodra.
INSTAT data also shows GDP per capita in Albania’s 12 regions ranged from 319,000 lek (€2,349) in the northeastern region of Kukes to 679,000 lek (€5,000) in Tirana at a nationwide average of 495,000 lek (€3,646).
GDP per capita remains slightly lower in northern regions in an ongoing development gap that dates back to communism, despite the past 25 years of transition to democracy and market economy having somehow bridged the gap.
Albania’s GDP per capita expressed in purchasing power standard, an artificial currency unit that eliminates price level differences between countries, was at 30 percent of the EU 28 in 2015, one of Europe’s poorest.
Agriculture, ‘trade, transport and hotels’ and industry were the top three sectors of the Albanian economy in 2015, accounting for 55 percent of the GDP.
