Albania is emerging as one of the countries with the best economic performance in the region in terms of figures and resilience to various shocks such as earthquakes, pandemics, or wars, but this growth does not seem to have impacted the improvement of its citizens’ quality of life.
Data from the International Monetary Fund (IMF) published in the latest Article IV consultation report for 2023 reveal that poverty in the country has increased in recent years.
According to the report, the poverty rate reached 25.2% in 2022, up from 22% in 2021, with an increase of 3.2 percentage points within a year.
The IMF states that the prospect of EU membership could provide an impetus to address long-term structural challenges, one of which is poverty.
“The poverty rate is noticeable compared to regional counterparts, and credit penetration is low,” says the IMF in the report.
“Albania has also experienced significant emigration flows, as its workforce has been attracted by higher incomes in EU countries. Corruption and deficiencies in law enforcement remain longstanding structural concerns”.
According to the IMF, unlike many countries, the poverty rate in Albania is lower among the elderly compared to the rest of the population.
However, the IMF warns that poverty among the elderly may increase because people are now working to secure shorter-term periods.
“In the future, more people are likely to receive partial pensions, social pensions, or remain without a pension due to insufficient contribution periods. The replacement rate may decrease, raising concerns about the threat of poverty among the elderly. While in 2012, those who retired had contributed on average for 35 years, those who retired in 2022 contributed on average for 27 years,” says the IMF.
Other IMF data show that Albania and Kosovo continue to rank last in Europe in terms of income per capita measured by purchasing power parity, measured in international dollars.
In 2023, this indicator for Albania was 19.5 thousand international dollars (the indicator eliminates price differences between countries). Meanwhile Kosovo has this indicator at 15.8 thousand dollars.
The highest income per capita in the region, according to purchasing power parity, is in Montenegro, at 28 thousand international dollars, followed by Serbia, with 26 thousand, and North Macedonia with 21.4 thousand.
