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WB report: Albania's economy has grown, but has not generated adequate employment

2025-10-31 08:30:34Aktualitet SHKRUAR NGA REDAKSIA VOX

WB report: Albania's economy has grown, but has not generated adequate

Albania's economy has grown steadily over the last two decades, but this growth has not generated adequate employment.

This is the conclusion of the World Bank, in a report on the autumn economic review in the ECA region, which includes 31 countries in Eastern Europe, the Balkans, the Caucasus and Central Asia.

Between 2000 and 2023, our country's economy grew by an average of 3%–4% per year, while employment grew by approximately 0.8-1% per year. This shows that, although the Albanian economy has had stable growth, its ability to generate jobs has been average.

For every 1% economic growth, employment has expanded by 0.15–0.2%, much lower than in countries like Turkey, Montenegro or North Macedonia, which have benefited more in creating new jobs from economic growth.

The data suggest that the Albanian economy has generated employment, but at a modest intensity compared to its more dynamic neighbors in the region. This indicates that the structure of growth in Albania has been more concentrated in sectors with low productivity or informal employment, limiting the potential for sustainable job creation.

The World Bank notes that improving the growth-to-employment ratio requires shifts toward more productive sectors and policies that promote formal employment in the economy.

The weak link between employment and economic growth indicates that growth has been uneven. This is because in Albania economic growth has been concentrated in sectors that do not require many workers, such as construction and trade. But there is also a distortion created by the growth of informal employment, without contracts, and which is not reflected in official indicators.

The bank has noted that the Albanian economy is growing, but not enough to employ more people. To improve this, growth needs to come from sectors that generate more employment, such as manufacturing, professional services, technology, and manufacturing.

The employment structure has been changing over the past two years, shifting from manufacturing to trade and services. The strengthening of the Lek and the decline in foreign demand have led to a third consecutive year of contraction in the industrial sector this year.

Small and medium-sized factories are going bankrupt, while large ones are not expanding with employees. Also, many agricultural workers are being transferred to construction and service activities, given the higher demand for workers in these sectors in recent years.

WB report: Albania's economy has grown, but has not generated adequate


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