PMR Research is a specialised custom market research unit of PMR Ltd., a British-American company based in Poland. We offer a wide range of research services in Central and Eastern Europe for companies interested in business over the countries in the region.

Research services provided by PMR Research in Albania include:

• brand and company image studies
• research on customer preferences, their satisfaction and their purchasing habits
• product concept tests
• usage & attitude studies
• internet surveys
• quantitative surveys - telephone, CATI, face-to-face
• qualitative research - focus groups, IDIs
• industry analyses (comprehensive analyses of given market sectors performed using PMR's proprietary methodology PMR MarketInsight)
• preparation of databases
• fieldwork services

Why to invest?

Fastest growing country in South Eastern Europe in the last 10 year period Low inflation rate 90% of exports designated to the EU Free trade agreements with the rest of the Balkan countries Low costs of utilities Young labour force Simplification of procedures Ongoing privatization programme Widespread Italian or Greek language skills

Economical environment

The Albania's GDP has been increasing at a relatively strong and stable rate of about 5.5% per year since 2003, with an inflation rate reaching 2.2% in 2008. Albania’s GDP is comprised of:

• industry (approximately 13%),
• service sector (approximately 39%),
• transport and communication (12%),
• construction (11%),
• remittances from Albanian workers abroad - predominantly in Greece and Italy (approximately 12.8%).

However, Albania has a large gray economy that may be as large as 50% of official GDP. Albania remains one of the poorest countries in Europe with 60% of all workers and approximately 24% of GDP coming from the agricultural sector.
Nevertheless, Albania has made a remarkable improvement with its economic growth during 2007 with around 6% and in the same year, the government approved a fiscal package constituting a good encouragement to investors. The country has a favourable tax environment with a flat corporate rate of 10% as well as low costs of utilities.
Albania is also trying to attract foreign and promote domestic investment by rationalizing and uniformly applying business laws, improving transparency in business procedures, restructuring the tax systems, reducing corruption in the bureaucracy, and resolving property ownership disputes. Still it has a lot to offer with the key sectors worth looking into such as energy, tourism, mining, textiles, agriculture as well as BPO centres. Despite that fact, the infrastructure development and major reforms in areas such as tax collection, property laws, and improving the business climate are proceeding slowly.

Albania has a very negative trade balance. In 2007, Albanian trade had EUR 3.1bn f.o.b. in imports, and almost EUR 790mn in exports. In September of 2008 value of exported commodities, increased by 36.4 % compared with August of 2008 and 27 % compared with the September of 2007.

The value of imported commodities went up by 2.5% compared with August of 2008 and increased by 6.9% compared with a month of the previous year. Despite healthy growths, Albania’s foreign trade depends heavily on the EU countries which accounts for 2/3 of its foreign trade operations (2006 – 89% of export and 67% of import). The main trade partners remain Italy and Greece. A characteristic of the Albanian exports is the re-exportation after the processing of raw materials. This is reflected in the export of the group “textiles and footwear” with 61% of the total of the export.

Albania has concluded Free Trade Agreements (FTAs) with Macedonia, Croatia, UNMIK (Kosovo), Bulgaria, Romania, Bosnia, and Moldova. In April 2006, these bilateral agreements were replaced by a multiregional agreement that entered into force in May 2007 and that is based on the Central European Free Trade Agreement (CEFTA) model.

Since 2002 the unemployment rate is gradually decreasing and reached 13.2% in 2007. The number of employed people in the public sector has declined as a result of systematic reforms in different sector of economy. This is also a consequence of the privatization of various economy sectors and Saving Bank of Albania.

Political environment

Albania was the last of the Central and Eastern European countries to undergo democratic and free market reforms. Its current Constitution was adopted by referendum in 1998. It should be noted that Albania started from a relatively disadvantaged position, due to previous ruler, Enver Hoxha's disastrous economic policy. Therefore, transition from a centrally planned economy to a market-orientated system has been very difficult for Albania comparable to country's communist times.

Albania’s political system is based on unicameral democracy. The People's Assembly (Kuvendi Popullor) consists of 140 seats, 100 of which are determined by direct popular vote. The remaining seats are distributed by proportional representation. All members serve 4-year terms. The President is the head of state and is elected by a three-fifths majority vote of all Assembly members. The President serves a term of 5 years with the right to one re-election.

Following the signing of the Stabilisation and Association Agreement in June/July 2006, EU ministers urged Albania to introduce necessary reforms, especially on freedom of press, property rights, institution building, respect for ethnic minorities and observing international standards in municipal elections. Albania is a non-EU member, with plans of entry but not a candidate. However it talks with the EU are in progress.
Last parliamentary elections took place in 2005, so June 2009 will be the next term. In 2008 the electoral law has been changed to regional proportional system.

Social environment

The regime's change in 1992 resulted in Albania’s gaining its religious freedom. Still the majority of Albanians today do not practice any religion but rather affiliate themselves with one of the four religious traditions. In Central and Northern Albania a large portion of people associate themselves with Islam. There are Orthodox Christians in the South-East and Roman Catholics in the extreme north of the country. Nevertheless, Albanian culture sees religion more as a matter of community affiliation and tradition rather than individual devotion. Provided religious adherence is mostly superficial, religious discrimination is rare.
The Albanian population is being considered as young with its average age of 31.7 years old. After 1990 the Albanian population has faced a problem of increased migration and population uncontrolled movements have affected the change of ration of urban population and that of rural population. In 2004 year the urban population has grown to 45 % and the rural population is decreased from 57.3 % to 55 %.
Corruption is one of Albania’s substantial problems - the corruption perception index (CPI) is one of the highest in Central and Eastern Europe with 3.4. It is only exceeded by Bosnia and Herzegovina, Ukraine and Russia.

Infrastructure and technological environment

Recent administrations have improved the country's infrastructure resulting in opened competition in seaports, railroads, telecommunications, electricity generation, natural gas distribution and airports.
Still, Albania’s rail system needs large investments, especially for the lack of direct links with neighbouring countries and the total length of rail is only 423 km long. At present the major cities of the country are connected with first class national roads. However, bad quality of inland road connections favours sea transport as a mode of moving goods to the destination market. The total length of the network is 18,000 km, of which 5,400 km is paved. At the moment there is only one civilian airport - Tirana International Airport. It was upgraded in 2007 when improvements included a new terminal building and airport access roads. The airport now has a capacity of around 1.5mn passengers and offers direct flights to and from London, New York and other European cities, attracting tourist and foreign investors from around the world.

Despite new investment in fixed telephony lines, the density of main lines remains the lowest in Europe with approximately seven lines per 100 people, still cellular telephone use is widespread. There were about 353,600 users of fixed line and 1.53mn users of mobile phones in 2005. Moreover there were 471,200 Internet users in 2006 constituting almost 15% of population and 852 hosts were registered in 2007.

General data

Area: 28,748 sq km
Population: 3 170 000 (2008)
Capital city: Tirana
Language: Albanian
Ethnic groups: Albanian 98.6%, Greek 1.2%, other 0.2% (2004)
Land boundaries: Greece, Macedonia, Montenegro, Serbia

Major economic indicators

	2006	2007	2008	2009f	2010f
GDP (EUR bn)	7.28	7.95	9.59
Population (mn)	3.13	3.15	3.17
GDP per capita (EUR)	2,164	2,326	2,634
GDP (constant prices y-o-y %)	5	6	6.1
Exports, real, y-o-y (%)	17.6	25.5	15.8
Imports, real, y-o-y (%)	14.1	25.7	16.9
CPI (average, y-o-y %)	2.5	2.9	2.2
Central bank reference rate	5.5	6.25	6.25
Monthly wage, nominal (EUR)	234	288	276
Unemployment rate (%)	13.8	13.2	12.5
FDI % GDP	0.26	0.46
BIZ % PKB	3.6	5.8
FX reserves (EUR bn)
Exchange rate to USD AVG	98.1	90.4	86.58
Exchange rate to EUR AVG	123.1	123.1	122.8

Last update: Q2 2009 

Useful data

Currency: Lek (ALL)
Time zone: GMT +1
Area code: +355


If you would like to find out more on the Albanian market opportunities please do not hesitate to contact us directly:
phone: (48 12) 618 90 80
faks (48 12) 618 90 08
e-mail: [email protected]

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Albania market research
PMR Research offers a full array of qualitative and quantitative research methodologies, providing services such as customer satisfaction studies, brand awareness and brand image research, distribution and competition studies, segmentation and sector analyses.

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PMR Consulting offers a wide range of consulting services in Central and Eastern Europe for foreign companies interested in the region. The typical projects include: competitive intelligence, sourcing, strategic advisory, consulting at foreign direct investments and mergers & acquisitions.