Albania Country Economic Memorandum - Strengthening the Sustainability of Albania’s Growth Model - WBG Diagnostic - September 2021

Jul 19, 2026

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Albania Country Economic Memorandum (WBG Diagnostic) assesses how Albania can strengthen the sustainability of its growth model by addressing binding constraints across the economy. It links the country’s lower living standards and persistent vulnerabilities to productivity limitations, workforce skills gaps, and weaknesses in the business environment. The report outlines reform priorities across economic context, investing in people, firm productivity, sustainable growth, and public finances, concluding with actionable directions for policy credibility and fiscal sustainability.

LanguageEnglish

CategoryResearch & Report

FormatPDF

Pages124

Reading Time5 h 12 min

AccessFree to download

Executive Summary

Chapter 1. Economic Context

Conclusion

Chapter 2. Investing in People

Fostering Foundational Skills Development through Quality Pre-University Education

Building on the Foundation of Higher Education Reforms

Meeting Labor Market Needs: Ensuring Lifelong Learning and Skills Training

Conclusion

Chapter 3. Increasing Firm Productivity

Improving the Business Environment

Strengthening Entrepreneurship and Innovation

Integrating Albania into the Global Economy

Conclusion

Chapter 4. Building a More Sustainable Growth Model

Promoting a Green Recovery

Reinforcing Resilience against Disasters

Sharing the Benefits of Economic Growth

Conclusion

Chapter 5. Strengthening Public Finances

Mobilizing Revenues

Strengthening the Efficiency of Public Spending

Strengthening Credibility of the Fiscal Policy

Conclusion

Public Disclosure Authorized Public Disclosure Authorized COUNTRY ECONOMIC MEMORANDUM Strengthening the Sustainability of Albania’s Growth Model Albania Country Economic Memorandum WBG Diagnostic September 2021 ALBANIA Strengthening the Sustainability of Albania’s Growth Model Albania Country Economic Memorandum WBG Diagnostic September 2021 This work is a product of the staff of the World, Bank with external contributions. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of the World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown do not imply any judgment on the part of the World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Rights and Permissions The material in this work is subject to copyright. Because the World Bank encourages dissemination of its knowledge, this work may be reproduced, in whole or in part, for noncommercial purposes as long as full attribution to this work is given. Any queries on rights and licenses, including subsidiary rights, should be addressed to the Office of the Publisher, the World Bank, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2422; e-mail: [pubrights@worldbank.org](pubrights@worldbank.org). Cover image: “Jungle”, Liliana Hasani, 2019, Albania © 2021 International Bank for Reconstruction and Development / The World Bank Group 1818 H Street NW Washington DC 20433 Telephone: 202-473-1000 [Internet: www.worldbank.org](Internet: www.worldbank.org) | Table of Contents | | | | --- | --- | --- | | Acknowledgments | | 11 | | Acronyms and Abbreviations | | 12 | | | Executive Summary | 13 | | | Chapter 1. Economic Context | 18 | | | Chapter 2. Investing in People | 32 | | Fostering Foundational Skills Development through Quality Pre-University Education | | 36 | | Building on the Foundation of Higher Education Reforms | | 43 | | Meeting Labor Market Needs: Ensuring Lifelong Learning and Skills Training | | 45 | | Conclusion | | 51 | | | Chapter 3. Increasing Firm Productivity | 52 | | Improving the Business Environment | | 54 | | Strengthening Entrepreneurship and Innovation | | 58 | | Integrating Albania into the Global Economy | | 63 | | Conclusion | | 65 | | | Chapter 4. Building a More Sustainable Growth Model | 68 | | Promoting a Green Recovery | | 69 | | Reinforcing Resilience against Disasters | | 81 | | Sharing the Benefits of Economic Growth | | 87 | | Conclusion | | 94 | | | Chapter 5. Strengthening Public Finances | 95 | | Mobilizing Revenues | | 97 | | Strengthening the Efficiency of Public Spending | | 106 | | Strengthening Credibility of the Fiscal Policy | | 108 | | | | | --- | --- | | Conclusion | 110 | | Albania Country Economic Memorandum Conclusion
| 111 | | List of Figures | | | Figure 1. Living standards are lower in Albania than in regional peers … | 14 | | Figure 2.… but concerted reform efforts could narrow the gap to peers | 14 | | Figure 3. Four Reform Priorities for a Stronger Albanian Growth Model | 15 | | Figure 4. There is a large gap in living standards between Albania and European Union economies due to the legacy of communism | 19 | | Figure 5. Growth accelerated in 2014–18, but a convergence of living standards will take a long time at current potential growth rates | 20 | | Figure 6. While value added per capita has increased, this has largely been due to a rise in employment and a shift in labor toward more productive sectors. Within-sector productivity had a negative contribution to growth in the recent years | 21 | | Figure 7. Long-Term Growth as a Function of Productivity | 22 | | Figure 8. While GDP growth has become more diversified, the country needs to increase productivity growth

FAQs

What is the main purpose of the Albania Country Economic Memorandum?

It diagnoses constraints that affect the sustainability of Albania’s growth model and sets out reform priorities across people, productivity, sustainable growth, and public finances.

Which areas are covered to improve growth sustainability?

The memorandum addresses the economic context, investing in people, increasing firm productivity, building a more sustainable growth model, and strengthening public finances.

How does the report approach challenges related to productivity and skills?

It highlights productivity growth needs, workforce skills and skills mismatch, and labor market training requirements, linking these to structural reform priorities.

Jul 19, 2026

Upload by Rowan