TIRANA, Jan. 14, 2024 – A potential deepening demographic crisis due to the increased emigration of young people is one of the top economic risks Albania faces, according to the head of the European Bank for Development in Albania
EBRD’s Ekaterina Solovova emphasized this week the need for concerted efforts to curb emigration and stimulate economic growth through strategic foreign direct investments.
“The deepening demographic crisis in Albania is a result of increased emigration, particularly among the younger population. Urgent and strategic measures are required to address this pressing issue,” she said. “Curbing emigration is not only about retaining our workforce but also ensuring sustainable economic growth.”
She added strategic foreign direct investments play a crucial role in creating high-quality jobs and stabilizing the demographic landscape.
Albania is already having problems with a shortage of labor due to high emigration and a declining population.
Solovova notes that Albania has the highest migration rate, relative to its population, in Central and Eastern Europe. The departure mainly involves young, educated males in the working age, leading to a diminished workforce in the country.
Remittances, reaching nearly 10 percent of GDP, provide a steady income flow for families but also contribute to increased wage expectations. Solovova acknowledges that the migration-related trend, combined with an aging population, is deepening the demographic crisis.
However, she underscores the challenges posed by high levels of youth migration and an aging population, asserting that addressing emigration should be a primary objective of economic and social policies, according to a lengthy interview she gave to Albanian business magazine Monitor.
Despite a gradual economic slowdown in 2023, Solovova anticipates an acceleration in Albania’s economic growth in 2024, projecting a 3.3 percent increase.
Solovova anticipates a short-term moderation in growth due to an unfavorable external environment. Economic growth is expected to slow to 2.5 percent in 2023, influenced by the weak outlook of Albania’s key trading partners, persistent high inflation limiting disposable incomes, and global and domestic monetary policies negatively impacting credit growth.
However, the continuous strong performance of the hospitality sector is seen as a positive factor, with economic growth projected to accelerate to 3.3 percent in 2024.
