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The "discovery" of the Deputy Minister of Economy: Albanians now live better than under communism

2026-07-20 22:49:58Biznes SHKRUAR NGA REDAKSIA VOX

The "discovery" of the Deputy Minister of Economy: Albanians now live

The standard of living in Albania has improved significantly since the fall of communism.

This is what the Deputy Minister of Economy and Innovation, Enkelejd Musabelliu, says, as he based this argument on the increase in salaries and per capita income.

"Since the day communism fell, every Albanian has lived better than they lived before. Much better than they lived before, definitely, progress is good."

"We need to see per capita incomes increase, wages increase," he said on A2 CNN.

He also spoke about the current debate, why the lek has strengthened and the euro has weakened.

"We must emphasize that when we talk about monetary policy, we are talking about one of the most complicated things in economics, the calculations for which are not made with pencil and paper, nor with fingers, but are being made with macroeconomic models, where a series of economic factors intersect and where economic scientists work to make projections on the one hand, but also to calculate the effects on the other. We must keep several things in mind.

First and most importantly, in economic language, these factors that are considered the main elements that determine, let's say, a macroeconomic model are called fundamentals and here we are talking about inflation, the unemployment rate, wages, all of which are crossed in a model to see how a country's economy is doing. The IMF's January 2025 report says two very important things regarding this debate. First, it says that these fundamental factors have been the main factors that have influenced the fluctuations of the lek-euro exchange rate in Albania to the extent of 85 to 95% and only a possible 5% of the foreign exchange rate has been influenced by external factors, which are not considered as fundamental factors of the economy.

Now, let's make a comparison of 2015 with 2025, this probably makes it even simpler. In 2015, 1 euro was exchanged for 139 lek. Like any given market that is in a certain equilibrium, the currency market also has demand and supply. From 2015 to 2025 we have a decline of the euro compared to the lek of 32.1%. But, in the meantime, what has happened to the flow of euros entering our economy? In 2015 we had an inflow of foreign direct investments of 890 million euros. We had foreign tourists spending 1.35 billion euros in Albania and we had remittances from emigrants to Albania worth 599 million euros, for a total of 2.84 billion euros. So, in 2015, 2.84 billion euros entered the Albanian economy.

Meanwhile, if we come to 2025, we see that the flow of foreign investments has increased by 83.5%, reaching 1.63 billion euros. The tourism boom has caused the spending of foreign visitors in Albania to reach 5.72 billion euros, increasing by 323% compared to 2015. Meanwhile, emigrant remittances have increased by 87%, reaching 1.12 billion euros. So, in total, in 2025, 8.47 billion euros have entered the Albanian economy from outside the borders of Albania, or 203% more than compared to 10 years ago. So, the euro and the lek are two goods that are exchanged for each other. If there are many euros, the value of the euro falls. If there are many journalists in the labor market, the salary of journalists falls. If there are few journalists in the labor market, their salary increases.

The same thing has happened with the euro. From the analysis of the economists of the Bank of Albania, from the analysis of the IMF and a number of other institutions, what has resulted is very simple: in macroeconomic language it is known as the balance of payments, that is, the deficit between income and expenditure. And we, for the first time, in 2025 have been in a surplus. So, more currency has entered Albania than has left. Of course, this has strengthened, let's say, the price of the lek in the economy and weakened that of the euro", said Musabelliu.

"Now, to explain why the lek has appreciated. The greatest appreciation of the lek was in the period 2023-2024, which also coincides with the greatest development of tourism. Meanwhile, in 2024 and onwards we have a decline or strengthening of the lek by only 2.8%. What has caused this? It has caused, on the one hand, the trade deficit, the income from trade of goods that exit and enter our economy to be reduced from 2021 to 2025 from 7.7% of gross domestic product, to 0.7% of gross domestic product.

Meanwhile, the current account deficit, that is, the money coming in and the money going out, has been reduced from 13.4% to 5.5%. This has also been combined with a decrease in the risk regarding financial investments in Albania. The credibility of the Albanian economy has increased. The “rating” of Standard and Poors and all the others, which have rated Albania's debt higher by, let's say, five or 10 million, has led to an increase in deposits in lek, savings in lek, and investments in lek, increasing the demand for the lek, which has also caused its appreciation", added Musabelliu. 


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