Strengthening the Sustainability of Albania’s Growth Model

The report discusses four development priorities for a stronger economy in Albania:

Investing in people and upskilling. To address the skills gap, Albania needs to shift its workforce from low- and medium-skilled jobs to high-skilled ones. This requires improving the learning process, reforming the university system, and better matching skills development to labor market needs.

Increasing firm productivity and creating better job opportunities. GDP per person employed in Albania would increase by 40% if Albanian businesses had the same level of productivity as the average Western Balkan firm. For Albanian firms to be more productive, the business environment must be improved, innovation must be strengthened, and integration of Albanians into the global economy must be deepened.

Building a more sustainable growth model. More than 70% of Albania’s waste is mismanaged, while earthquakes and floods cause damage costing $147 million each year, on average. Albania needs to build an economic model that is environmentally conscious, and more resistant to natural disasters.

Strengthening public finances. Albania’s public debt is well above the average of the six Western Balkan countries. To ensure the sustainability of the country’s finances, personal income tax rates should be fairer, VAT revenues increased, and fiscal policy credibility reinforced, particularly through a sustained political commitment to fiscal rules.


Albania’s economic model requires greater investment in people’s skills, firm productivity, sustainability, and public finances, says the new World Bank Country Economic Memorandum (CEM) for Albania, released today.

Albania has been severely impacted by the economic shocks which followed both the 2019 earthquake and the COVID-19 pandemic. Once the ongoing health crisis subsides, the country will need to refocus on its long-term economic objectives, which include building a strong and sustainable growth model to improve citizens’ living standards, thereby helping incentivize people with skills and talent to remain in Albania.

“Through this report, we conduct a fresh analysis of Albania’s development challenges, summarize progress with reform implementation, and offer key recommendations that can help Albania achieve a sustainable, resilient and inclusive economic recovery,” says Emanuel Salinas, Word Bank Country Manager for Albania. “In our recommendations we also focus on what needs to be done to enable the Albanian people to have healthy and productive lives and more and better jobs.”