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Price crisis, funds for economic assistance fell in 2022

Price crisis, funds for economic assistance fell in 2022

The World Bank indexed this year with a 20 percent increase in the relative poverty line due to the price crisis, but in Albania the budget funds for economic aid have not only not increased, but have decreased symbolically compared to the 10th month of 2021 according to official data of the Ministry of Finance.

By the end of October 2022, the government had distributed 19.1 billion lek to families in need that belong to the poorest 20 percent of the country's population.

The amount distributed should have been higher than in 2021, because the price crisis has increased costs more for the poor, but it was actually about 0.5% lower than the year before.

The use of the budget fund of economic aid by the government has gone against the advice of international financial institutions such as the IMF, the World Bank and expert groups.

All over the world, governments are applying direct aid packages and other forms of compensation to the poorest families as the most effective means of protecting them from rising prices.

In a special study, the World Bank has evidenced that Albania will face a wave of people who are not protected by the social security scheme, due to the high informality in the labor market and the need for financial support from the budget will increase.

The Bank noted that the Government of Albania should consider further strengthening its social assistance programs, especially Economic Assistance, beyond the current function of providing temporary support to poor people.

Economic assistance for a family with one person is currently 6.5% of the minimum wage, 13% of the unemployment benefit and 25% of the social pension.

For a beneficiary family of two adults and two children, the benefit is equal to 18.5% of the extreme poverty line of US$3.20 per day and 10.7% of the relative poverty line of US$5.50 per day, the Bank estimates.

Currently, approximately 9% of the population in the country are treated with economic assistance, while poverty is widespread in 24% of the population in Albania, the highest in the Western Balkans, emphasizing that the coverage remains very low in relation to the need./Monitor

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