Albania: Tourism boom does not lead to consumption boom

Surprisingly, the fact is that while tourism in Albania is gaining momentum, consumer demand in the country remains low.

Last year, 10 million foreign tourists visited Albania, which led to an increase in revenues in the hotel sector. According to the country's Prime Minister Edi Ram, tourism in 2023 added about 3 billion euros to the treasury.

Hoteliers, restaurateurs and bartenders are happy: their balance sheet for the past year looks great. The tourism boom has also contributed to an increase in the profits of textile enterprises, the wine industry and the car rental sector.

However, even such a high demand in the tourism sector could not improve the overall financial condition of Albania. With a 100% increase in tourism revenues, the country is developing at a slow pace. According to INSTAT, economic growth in the 3rd quarter of 2023 amounted to only 3.46%. Household consumption also grew minimally, rising by only 2%. And in agriculture, forestry and fishing, there was a decline of 0.5%.

The reason for this is the low purchasing power of the local population, especially young people. According to the observations of representatives of the retail trade, young people began to buy less even such basic products as bread, sugar, meat. This trend is especially strong in the northern regions of the country.

The discontent of the population results in protests by livestock breeders and farmers demanding lower taxes and the abolition of excise taxes on their products. And perhaps then the country's economy as a whole will look like a tourist paradise, attractive not only for foreign citizens, but also for the indigenous inhabitants of Albania.