Consumption at low level, tourists do not cover population contraction in the first quarter

2025-06-26 16:10:00, Ekonomi CNA

Consumption at low level, tourists do not cover population contraction in the

Final consumption of the population increased by only 2.45% in the first quarter of 2025, this is the lowest level since the same quarter of 2021.

The growing number of tourists does not seem to be covering the effect of the country's emptying out by the high emigration of young people. In January 2025, the country's population shrank by more than 27,000 people in just one year.

The final consumption of the population represents a key component of Gross Domestic Product (GDP), as it reflects not only the purchasing power of the population, but also the overall economic situation of the country and the impacts of external factors such as emigration and tourism.

High emigration of young people has weakened the growth rates of consumption, especially in the first quarters, when the effect of tourism is not yet felt. Every year, thousands of citizens leave for economic reasons, the vast majority young people, leading to a contraction of the consumer base within the country. This has a direct impact on spending on food, services, education and housing. The departure of young people has an even stronger impact since they are larger consumers of food, drinks and clothing.

While emigration has a constant effect, tourism has a more seasonal effect. Consumption usually improves and peaks in the second quarter.

Official GDP data show that the final consumption of the population in Albania is sensitive to external developments such as tourist arrivals and imported inflation, and to internal demographic trends.

While tourism can bring positive seasonal effects, emigration, on the other hand, is eroding the foundations of economic sustainability, not just consumption.

The pace of population decline has increased in recent years, especially without the pandemic. From 2019 to 2025, according to official data, the population shrank by 17 percent, the decline being much stronger among the young population up to 29 years old.

After the pandemic, Albania experienced positive developments, especially in tourism, where the number of visitors increased at a high rate. In 2025, arrivals have stabilized, while data for the first five months of 2025 show that their growth has not been more than 3%. Last year, in this period, the number of visitors was 40 percent higher than in 2023.

The economy's exposure to tourism and services has increased in recent years, but the lack of sustainability could expose the economy in all its indicators. A day earlier, INSTAT reported that employment indicators deteriorated in the first quarter of 2025./ Monitor Magazine