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Economy

Albania is a small and open economy classified as "Lower Middle Income Country" by the World Bank with a nominal Gross Domestic Product (GDP) of 11 billion EUR and GDP per capita of 4,000 EUR as for 2016. GDP composition is as follows: services: 59%; agriculture, forestry and fisheries: 19%; industry: 11%; construction: 10%.

The media sector in Albania accounts for 0.9 % of GDP, equaling revenues of roughly 100 million EUR per year, of which 67 million EUR are collected by pay per view television and the revenues of public television, while 31 million EUR goes to free on air television stations and 4.5 million EUR belong to newspapers.

Since the fall of Communism in 1991, the Albanian economy has largely depended on remittances from a growing diaspora of population that migrated toward wealthier neighboring countries such asItaly and Greece and on increased revenues from a slowly grow in tourism sector.

Rising commodity prices since 2004 have helped to revive oil extraction and processing as well as mining, mostly chromium, copper and limestone. Albania managed to produce up to 1.4 million tons of crude oil in 2014, accounting for up 5 per cent of the country’s GDP. Chromium production was 653,000 tons in 2015 making about 1% of the country’s GDP while cement production was 914,000 tons - with a value of 40 million EUR. Copper production effectively ended in 2014 due to a combination of low international prices and over mining of the current reserves. Albania benefits from significant hydropower resources which supply all its electricity production, making the country one of the few counties in the world running on nearly 100% renewable energy sources.

The poor housing and small housing stock inherited from the communist regime, mixed with remittances from migrants, created a construction boom in the past decade - mostly concentrated in the construction of apartments but also for tourism and services related developments. However, the Global Financial Crisis of 2008 hit Italy and Greece hard, producing the European debt crises and had a rippling negative effect on remittances that Albanian migrants sent home.

The rate of economic growth in Albania halved from more than 6 percent on average in the years before the crisis to less than 3 per cent after the crisis. Furthermore, the GDP growth after 2008 was fueled by a small number of massive foreign investments aiming to build a gas pipeline and a chain of hydropower plants, which have little effect on the overall income of the Albanian population at large. Public finances were unprepared to face the effects of crisis and the country’s public debt increased sharply to 73 per cent of GDP in 2016, from 56 per cent in 2008.

Albania has a working age population of 2 million, of which only about 600,000 people are employed in the formal sector. From these 600,000, about one third is employed in the public sector and the rest in the private sector. Self-employment and small businesses dominate the private sector jobs, while clothes and apparel manufacturing along with outsourced voice over IP marketing services are also important sectors.

Massive emigration rates have caused also a 'demographic problem' for the country. Fertility rates are declining and the country’s economic potential is at risk from continued migration and an aging population.

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