Albanian Fact encompasses a study of the economic trend of Albania. Albania had to overcome a lot of problem before they could stabilize their economy. The country is still rated as one of the poorest countries according to West European standards. The economy has undergone some changes since it was transformed into an open market economy. The Democratic Government succeeding the previous government is emphasizing on reforming the infrastructure. Albania is primarily an agricultural country.
GDP Growth in Albanian Economy
The GDP of Albania fell by more than 50% due to the mass exodus, which took place after the collapse of communism in Albania. The government put a lot of emphasis on liberalizing the economy and privatizing the agricultural and industrial sector. This trend of privatizing the various sectors continued till 1995 when most of the small, large and medium enterprises were privatized. This fuelled the growth of GDP in Albania. Albania reaped enriching results after the privatization. The GDP went up by 11%, 8%, 8% in 1993,1994,1995 respectively. The annual inflation rate was reduced from 25% to single digits, thus resulting in the stability of the economy.
The GDP rate dropped by 9% during 1996 through 1997. The inflation rate shot up as the budget deficit exceeded 12%. Albanian economy is undergoing a massive reformation with the aid of IMF and World Bank. With a view to stabilize the economy the largest bank of Albania, the Savings Bank, was sold to Raiffeissen Bank of Austria. However, the country copes with their economic distress through the remittances of 20% from Greece and Italy. After privatization of the sectors Albania economy was recovered from the distress and shot up to 7% by 1999.
Sectoral Growth of Albania
Before World War II, there were only small-scale industries in Albania. During 1937-39 the industrial sector contributed only 10% to the total revenue. The post war period witnessed development in the industrial sector in Albania. The gross industrial output increased by 20%, 12%, 9%, 5%, 3% between 1951-90. By late 1970s the socialized sector reported 100% increase. Due to the rapid growth in the industrial sector 15% of all wage earners joined the industry. The contribution made by the industrial sector to the total revenue has increased to a considerable amount in 2004.
Nearly 50% of the GDP was contributed by the agricultural sector in Albania in 2001. 26% of the total land is considered to be arable. Albania claims to be self-sufficient even though half of the population is not cultivating land. Collective farming was first introduced in 1946. Over the years there has been an increase in the number of state owned farms in Albania. By 1973 100% of the farms were proclaimed to be under government ownership. The cooperatives contributed 74% of the total agricultural production. The agricultural sector shrunk by 21% in 1991.But in 1992 privatization helped to boost the production.
Albania mainly exports metals and machinery and earns a quarter of the revenue through these exports.
Unemployment is rampant in Albania since the government policies mostly have proven to be failures.
