Albania is a small Balkan nation with a population of 2.9 million. Albania has made significant progress over the last 3 decades; poverty has been cut in half and it has moved from an extremely poor nation to become a middle-income country. Unemployment is at record lows at 11.5% with GDP per capita at $5448 USD. In 2018 economic growth was at 4.1%, there is an expected slowdown for 2019 with GDP decreasing to 2.9%, but a slight rebound is expected in 2020 to 3.4-3.6%. While the country is has made significant gains, Albania is still relatively poor in comparison European counterparts. Poverty is still high at 34.6%, with a poverty line at $5.50 a day.
The economy still struggles with remnants of the communist state. The legacy of State-Owned Enterprises (SOEs) still plagues macro stability. Albania’s fiscal position improved in 2019 however, risks from contingent liabilities and SOEs still remain high. Improving the investment climate and private sector growth and removing barriers to business ownership will be critical to maintaining macro fiscal and economic stability. The government recognizes this and has worked to make structural reforms to foster private sector development and encourage entrepreneurship. This has occurred alongside the country applying to gain EU membership. Albania gained candidacy status in 2014, but ascension isn’t expected before 2020.
Maintaining the reform momentum and implementation is critical to Albania’s continued economic growth and European Union (EU) integration. To accelerate the pace of equitable growth, Albania is implementing structural reforms that will raise productivity and competitiveness in the economy. These reforms are important as Albania’s economy has shifted from an agriculture focus to industry and service. This change has also allowed SME development in a variety of sectors. SME’s now account for close to 70% of formal, non-agricultural private sector employment. There is still ample growth needed in the entrepreneurial space in Albania. Majority of Albanians are still uncomfortable perusing entrepreneurship, as Albanians still prefer salaried employment by the state.
Women’s participation in business is relatively low in Albania, but progressively increasing. Almost 30% of micro-businesses are owned/administered by women. Historically women have faced multiple challenges to business ownership; limited access to property and credit along with the lack of policies promoting entrepreneurship until recently have caused the lower participation of women in business. CEED has been involved in Albania for several years, providing programming for the emerging entrepreneurial space and specialized programming for women. Enhancing leadership for business owners as well women in management positions.