Paradoxically, Albania is among the countries with the best economic performance, but poverty is increasing

2024-01-23 09:43:00, Ekonomi CNA

Paradoxically, Albania is among the countries with the best economic

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Albania is turning out to be one of the countries with the best economic performance in the region, in terms of numbers and resistant to various shocks such as earthquakes, pandemics, or war, but this progress does not seem to have affected the improvement of the lives of its citizens.

Data from the International Monetary Fund (IMF) published in the latest staff report for the Article IV consultation for 2023, revealed 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, an increase of 3.2 percentage points within a year.

The IMF says the prospect of EU membership could provide an impetus to address long-standing structural challenges, one of which is poverty.

"The poverty rate is evident compared to regional counterparts and credit penetration is low," says the IMF in the report.

"Albania has also had large immigration flows, as its labor force has been lured by higher incomes in EU countries. Corruption and deficiencies in the rule of law 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 could increase, because people are now working on insurance for shorter periods of time.

"It is likely that in the future, more people will receive partial pensions, social pensions or remain without a pension, due to the insufficient duration of the contribution. The replacement rate may decrease, raising concerns about the threat of poverty among the elderly.

While in 2012, people who retired had contributed for an average of 35 years, those who retired in 2022 contributed for an average of 27 years", says the IMF.

Albania and Kosovo, with the lowest per capita income in Europe, according to purchasing power

Other data from the IMF show that Albania and Kosovo continue to remain last in Europe in the per capita income indicator measured according to 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). Albania leaves behind Kosovo, which has this indicator of 15.8 thousand dollars.

The highest level of per capita income 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./ Monitor