The inequality not measured by GINI – Albania

If there is one indicator that more accurately breaks down the state of structural inequality in Albania, it is not necessarily the GINI index, but rather the distribution of bank savings. This fact is often overlooked in public discourse and official fiscal analyses offers a clearer lens through which to view the real distribution of wealth and economic power. While GINI measures the flow of income, deposits reflect accumulation, and it is precisely there where the social gap begins to deepen.

By the end of 2024, more than 58% of individual deposits in the Albanian banking system were controlled by just 5% of accounts. These few individuals hold on average 18 times more liquid wealth than the rest of the population. This is not a temporary deviation, but a permanent structure of capital distribution—a mirror that challenges any narrative of “inclusive development” that recent governments have embraced.

The GINI index for Albania has been reported for years within the range of 32–34—a level that places the country in the category of moderate inequality. On the surface, this makes Albania comparable to other countries in the region such as Serbia or Montenegro. But this indicator has two critical limitations:

1. It measures only reported income—and in a high-informality economy, this means the reality is harsher than it appears.
2. It does not include accumulated wealth—neither the capital built up over years, nor real estate, nor bank deposits.

This means GINI can give a false sense of equality, while real wealth data reveals dramatic and persistent inequality. Deposits are the clearest reflection of real power to invest, consume, or influence and in Albania, this power is deeply concentrated.

From inequality accumulation to its inheritance

The 2024 data merely confirms a trend that has accelerated for over a decade: the deposits of the wealthy grow faster than those of the middle class. In 2024, deposits under 2.5 million ALL increased by 5.2%, while those above that threshold grew by 5.9%—a gap that reinforces the “wealth over wealth” effect.

This division is not only economic—it is intergenerational. Concentrated wealth is not only accumulated but also inherited and reproduced through better access to quality education, superior services, more capital for enterprises, and stronger negotiating positions vis-à-vis the market and the state. Thus, a nominally growing economy does not at all guarantee progress for all.

The cost of capital inequality speaks beyond numbers—It speaks to structural consequences

A society where a minority controls the overwhelming majority of financial capital faces multiple consequences:

❗ Exclusion from financing – Individuals with little savings do not meet criteria for favorable loans and are excluded from self-directed development.

❗ Blocked entrepreneurship – Without access to startup capital, the middle and lower classes cannot participate in the market economy.

❗ Capture of politics and decision-making – Wealth translates into political and institutional influence, distorting public priorities.

❗ Erosion of trust in the state – The perception that the system favors a minority increases the sense of injustice and fuels emigration, political passivity, or even instability.

Three Pillars for a new approach to savings and inequality

If savings speak louder than statistics, then they deserve more attention in how we think about economic policy. The inequality hidden behind bank deposits is not just a matter of distribution, but a deep symptom of a malfunctioning social contract and fiscal policies that exclude many.

It is time for a new approach that sees saving not as a privilege of the few, but as an economic right and a development tool for the many. This approach must be built on three essential pillars:

1. Fair redistribution through taxation on wealth and financial capital

Albania’s current tax system treats income sources from wealth and capital leniently, such as interest from deposits, profits from financial instruments, or real estate. To reverse accumulated inequalities and build a fairer foundation for public finance, it is essential to implement progressive tax rates on these categories of income and assets. This includes:

• Proportional taxation of deposit interest, with rates increasing with the deposit amount;
• Differentiated capital gains taxes, especially for short-term investments;
• Periodic net wealth taxes on wealthy individuals, as a redistributive mechanism to curb wealth concentration.

Such an approach not only contributes to more sustainable public finances, but also restores the state’s role as a mediator for real equality.

2. Promoting Citizen savings and collective investment: from individual saving to social capital

In an environment where traditional savings instruments favor the well-off, the middle and lower classes remain excluded from mechanisms that generate capital and economic influence. An alternative savings and joint investment architecture must therefore be built, including:

• People’s bonds for local infrastructure projects or those related to energy, education, or digitalization;
• Collective guarantee funds to ease credit access for small and young entrepreneurs;
• Crowdfunding platforms for social and economic initiatives in underrepresented communities.

These tools are not just financial mechanisms—they are new forms of civic participation in the real economy and the future of the country.

3. Inclusive financial education: competence for long-term equality

For many Albanian citizens, saving remains a passive act—a response to economic insecurity rather than a strategy for wealth building. This can only change if financial literacy becomes an integral part of the education system and public discourse, through:

• Mandatory financial education modules in primary and secondary schools, going beyond basics toward planning, investing, and risk management;
• Media and digital platform initiatives that translate financial concepts into clear, accessible language tied to local realities;
• Community training for marginalized groups, particularly women and youth in rural areas, who are often excluded from formal information networks.

A financially literate population is better equipped to make smart decisions, build real savings, and avoid predatory debt—a key foundation for sustainable and inclusive growth.

These three pillars are not separate options—They are a vision

A new vision in which saving, investing, and economic education belong to everyone, not just a privileged few. Only then can Albania transition from a divided and concentrated economic model toward one that is equitably shared.

Instead of a conclusion: An economy that shares, is a society that moves forward

Wealth distribution is not just a matter of justice it is a precondition for sustainable development. Albania cannot build a modern economy on a structure of concentrated savings, as this creates silent monopolies of economic influence that distort competition and undermine democratic dynamics.

When 5% of the population controls more than half of the financial capital available to individuals, we are not merely facing inequality.

We are facing a self-reproducing system, detrimental to the majority.

Savings data tell us more than any other statistic. They show who has the power to decide the future—and who does not.