In 59% of municipalities, "natural person" businesses are declining, due to population contraction

2025-07-24 07:35:00, Ekonomi CNA

In 59% of municipalities, "natural person" businesses are declining,

Most municipalities in the country are seeing strong population contractions and consequently business declines.

Official data from INSTAT show that in 36 municipalities out of a total of 61, the number of individual businesses that usually include self-employed people or businesses with a turnover of up to 2 million lek has decreased significantly.

Nationally, over 97,000 entities were active as natural person businesses in 2024, with an annual growth of only 0.5%, but in small municipalities there is a sharp decline due to the decline in population. Natural persons accounted for 74% of total enterprises (excluding farmers), while the rest are registered as legal entities, according to INSTAT.

According to the processed data for the annual change in "Natural Person" businesses in 2024 compared to 2023, a strong polarization is observed between large urban areas and smaller municipalities. In most municipalities there is a decrease, while only a limited part has recorded an increase.

In the municipalities with the greatest crisis in individual businesses, Pustec leads with a drastic decrease of -25% of businesses, followed by Konispol -7.2%, Tropoja -6.7%, Mati with -6.5% and Selenica -6.1%.

These municipalities are typically small, have high levels of emigration, an aging population, and lack of opportunities for sustainable development of private activity. The decline of businesses indicates not only the departure of the population, but also the closure of self-employment initiatives due to the lack of a local market.

In contrast, the municipalities with the highest growth in individual businesses are Këlcyrës +10.7%, followed by Delvina +8.9%, Saranda +7.5% and Vora with 6.6%, which have strong tourist or logistical connections, such as Saranda which has benefited from tourism, or Vora which is located in the industrial corridor between Tirana and Durrës. Likewise, Gjirokastra and Libohova have benefited from investments in agrotourism.

Tirana, Durrës and Shkodra show slight growth, which indicates stability in economic activity in urban centers, which still gather population from rural areas and thus maintain the dynamics in small businesses.

Demographic trends are becoming determinants of the regional economy. The shrinking and aging population is driving small businesses into bankruptcy due to shrinking demand but also due to emigration from larger urban centers.

The country's population has fallen by 17 percent from 2011 to 2024, with the rate of decline accelerating in recent years due to the exodus of young people and extremely low birth rates./ Monitor Magazine