60% of families in Albania do not have money to cover unexpected expenses

60% of families in Albania can have enough liquidity to get through the month, or to do their expected activities.

But, if they will face unexpected expenses such as an illness or other problem, they would not be able to cope.

The material "Are Albanian families financially fragile", by Elona Dushku, Research Department, in the Bank of Albania has analyzed the financial fragility of Albanian families based on the ability of families to cope with an unexpected expense, as well as analyzes alongside socio- economic (such as: age, gender, debt), the role of composition of the portfolio of household assets.

Financially fragile households are those households that can meet expected expenses but do not have sufficient liquidity to meet unexpected expenses.

Using the data obtained from the first round of the Family Wealth Survey in Albania, it has been estimated that 60% of families in Albania are considered financially fragile, that is, they are families that do not have enough liquidity to cover an unexpected expense, in the measure of the median total family income.

Estimates obtained from multinomial regressions show that the probability of families being financially fragile is negatively related to the level of education of the reference person, the study estimates.

Also, the results show that financial access and family ties reduce the likelihood that families will be financially fragile, according to BSH.

Other INSTAT data show that an Albanian family spends an average of 40% of total expenses on food alone. other Eurostat data show that the budget we spend on food is the highest in Europe.

This is an indirect indicator of poverty, as spending on food is an essential existential need. As food takes the main part of the budget, there is little liquidity left to meet other needs, especially unforeseen ones.

Eurostat data show that an average European family spends 13.6% of the total on food, or three times less than in Albania.

Even in the countries of the region, this indicator is lower, where the lowest level is Serbia (24.1%), Montenegro (27.2%), North Macedonia (30.6% for 2019), Bosnia and Herzegovina (32.2%). ). The data for Kosovo are missing, but the previous indicators were lower than those of Albania.

Spending a significant portion of the budget leaves less room for other activities. For example, for entertainment and culture, a European family spends 8.4% of the budget, while an Albanian family only spends 2.7%.

Europe spends 8.5% on restaurants, while Albania spends 7.3%.

The budget for communication is higher, with 3.9% in Albania against the European average of 2.3% due to more expensive prices.

Europe spends more on housing, water, electricity, paid rent, with 24.1% of the total, compared to 9.8% of Albanian families./ Monitor