The Albanian economy is facing strong paradoxes, which in the end are costly for citizens' pockets. While the government boasts about the recent economic growth, consumers complain about the lack of income and high prices. An economic growth that does not translate into more money or more optimism.
The year just ended was generally considered good for the economy. This seen at the macro level and from the eyes of the government and its supporters. Since in the micro, in other words in the real economy, the situation is quite different.
Economic growth in 2024 is expected to be formalized at 3.9%. The same level of growth is predicted for this year that has just started. Satisfactory compared to other countries in the region. It is now clearly visible that our economy has returned to the positive growth bed after the pandemic in 2020.
But in economics, as in many other fields, the devil is in the details. A sound economic growth would be reflected in more jobs and more income for citizens and businesses. This has been felt very little, if not at all for a part of the citizens.
The increase in salaries has started only in the last two years and mainly in the state sector, being especially sensitive in 2024, which preceded this year's general elections. Meanwhile, in the private sector, the average salary remains significantly lower, which indicates the financial impossibility of business to keep up with the government.
The difference between the salary in the state and that in the private sector has deepened significantly and currently, an employee in the state receives over 27,000 lek more per month than an employee in business.
Wages are the main source of income for the vast majority of Albanians.
The lack of income, but not only, also the general increase in prices, which for food products has been even more sensitive, has influenced that consumers do not feel very optimistic.
According to the data, the increase in food prices, or in other words, food inflation, is significantly higher than the general inflation, mainly affecting low-income groups, such as pensioners or the poor.
On average, in our country a family spends about 40% of its budget on food, while for those with low incomes or pensioners, nutrition amounts to more than half of the monthly income. Which testifies to the low level of the standard of living, which is undoubtedly a source of pessimism.
And this was clearly seen in December, where confidence in the economy fell. An almost unusual performance considering the period, which coincides with the end of the year holidays with the approach of citizens to spend and consume more. But that didn't happen this year.
The periodic survey published by the Bank of Albania showed that in December, confidence in the economy fell by 3.8%. A pessimism that was felt by all the main sectors of the economy, such as services, trade, industry and construction, as well as by consumers. The latter feel pessimistic based on the current financial situation; the impossibility of large purchases; the price level and the general economic situation.
But for experts, the decline in confidence in business, which is also the main agent of the economy, is more worrying. The one who creates jobs, pays more taxes and creates added value in the economy. The main engine that moves money and all other economic instruments is showing signs of slowing down.
In economics, money is trust, and a decline in trust translates into less consumer spending by citizens, less business investment, and less money in circulation. Which in a vicious circle leads to the decline of the economy. Therefore, trust is essential to set the engines of the economy in motion.
2025 is an election year and usually, in such periods there is more money in circulation, as a result of more benevolent social policies from the government. Such a climate has begun to be felt, first with the pensioner's bonus in December, then with the promised spring bonus, with the bonus for poor families, with additional subsidies for farmers and recently, even with the reduction in the price of energy electricity at 1 lek per kilowatt hour for family subscribers.
Experts recommend several measures, as a way for confidence in the economy to be stable and to fuel economic growth. Consequently, the latter should be higher and healthier, translating into more disposable income for citizens and a better life for them.
The economy is not built in a day, neither that of a family nor that of a country. But it is constantly fed, so that at the end of each day there is more confidence and this confidence is justified by more money. Conversely, no matter how you look at it, the vessel will always be half empty. (A2 Televizion)
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MUND TE LEXONI GJITHASHTU
