WB report: Albania is growing, but poverty is not decreasing

2025-02-04 07:21:00, Ekonomi CNA

The World Bank estimates that in 2023, per capita income in Albania was $8,575.

The average daily income for a person in our country was 23.5 USD per day, a value close to the prosperity standard of 25 USD per day defined by the World Bank as a global average value of a dignified life.

With the decrease in population according to the 2023 Census data and with economic growth of around 4% in 2024, the average daily income of Albanians exceeds the standard of prosperity, but on the other hand, according to data from the World Bank, our country also has the highest level of poverty in the Region.

According to the latest World Bank reviews, the number of people with incomes of 6.7 USD per day (relative poverty) will be more than 20 percent of the country's population by 2024.

Achieving standards of prosperity on the one hand and a fifth of the population in poverty on the other hand demonstrate the country's high economic inequality.

As the economy grows, it is not distributed fairly. The rich get richer and the poor get poorer.

The World Bank defined the prosperity standard (USD 25 per day) in order to increase sensitivity to issues of the distribution of economic growth.

States will need to identify the percentage of the population living below this gap in order to then apply fair redistribution policies.

The Bank tracks shared prosperity by monitoring the growth of average incomes in the bottom 40 percent of the population. The prosperity standard set at $25 a day (adjusted for differences in purchasing power parity between countries) is defined as the average factor by which incomes need to be multiplied to bring the world to the standard of prosperity. For example, for a person whose income is $2.50 a day, it needs to be multiplied 10 times to reach the standard of prosperity.

The World Bank emphasizes that Albania has an untapped human capital potential that can drive growth and development.

The country faces challenges such as migration, economic inactivity and underutilization of talent. Closing the gender employment gap alone could lead to a 12 percent increase in GDP per capita in the long term.

The underutilization of educated individuals is also hindering productivity growth and the returns from the country's education investments, ensuring sustainable growth./ Monitor Magazine