Once one of the poorest countries in Europe, Albania is now seeing a gradual reduction in poverty, fuelled by rising employment, higher wages and private sector investment. As Albania strengthens its ties with the EU, its progress in reducing poverty offers valuable insights for small developing economies around the world.

In 2024, the country’s economy grew by 3.3 percent, driven by private consumption, tourism and the construction sector. World Bank projections forecast a slight increase in 2025 to 3.4 percent. Inflation has significantly weakened, and employment has risen, especially in the private sector, where wages increased on average by 12.7 percent across all industries. As a result, the poverty rate is gradually decreasing, falling by 1.7 percentage points in 2024 alone.

This economic growth is part of a broader regional trend, as the economies of the Western Balkans benefit from increased domestic consumption and better access to EU markets. Structural reforms, including the improvement of regional connectivity and diversification of exports, have played a key role.

Addressing the causes of poverty

Although Albania’s economic trajectory is positive, challenges remain. Rural communities still face disproportionately high levels of poverty. A 2025 study by the Agricultural University of Tirana highlights the need to increase agricultural productivity and reduce the gap between urban and rural areas through targeted reform policies.

Government initiatives are focused on macroeconomic restructuring and the development of priority sectors such as tourism, digitalisation and agriculture. Special emphasis has been placed on improving food security through updated consumer baskets based on caloric intake and enhancing the methodology for data collection, thereby improving poverty measurement and intervention planning.

EU integration and long-term vision

Albania’s progress is also linked to the EU accession process. Since the start of formal negotiations in late 2024, the government has implemented reforms in public procurement, financial management and human capital development. The World Bank’s Country Partnership Framework for Albania (2023-2027) highlights three main goals: creating more quality jobs, strengthening human capital, and increasing resilience to economic shocks.

As part of this strategy, Albania has signed new development loans and grants worth more than 600 million US dollars, including 80 million for e-government reforms in April 2025.

One of the key elements of the poverty reduction strategy is the development of agriculture. Since rural areas record higher levels of poverty, increasing agricultural productivity directly contributes to its reduction. National programmes now prioritise farmer training, investment in infrastructure and access to regional markets.

One of the most visible examples of how economic growth is reducing poverty in Albania is the Regional and Local Roads Connectivity Project, which, with the support of the World Bank, is helping rural communities regain access to basic services and markets.

The World Bank underlines that migration management is an important development tool. Almost one in four residents of the Western Balkans lives abroad. When properly directed, migration can reduce poverty by increasing remittances, developing skills, and creating a reverse "brain drain" effect. Recommended policies include training programmes for mobility, bilateral social security agreements, and channels for diaspora investment.

Although Albania faces risks such as global trade tensions and domestic fiscal pressures, the current trajectory remains positive. Structural reforms, combined with continued EU integration and targeted poverty reduction policies, are improving lives across the country.