Population decline doesn't help, Albania last in Europe for per capita income even in 2024

Albania continued to remain last in Europe in terms of per capita income measured by purchasing power for goods and services, even in 2024, despite the country's population being reduced by more than 400 thousand people, dropping to 2.4 million inhabitants according to the 2023 census.

Although the country has had satisfactory growth in recent years and there are fewer people to whom the value of goods produced in a year is distributed, the well-being of individuals does not appear to have increased, also affected by relatively more expensive prices.

The latest Eurostat data revealed that individual consumption per capita (AIC), an alternative indicator that better measures household well-being, was 41% of the European Union average in 2024, unchanged compared to 2023. At this level, Albania ranks last in Europe, along with Bosnia and Herzegovina, also with 41%.

In the region, the highest incomes in purchasing power parity are in Montenegro, at 68% of the EU average, up from 65% the previous year. In second place is Serbia, at 56%, up from 55% a year earlier. Per capita income in purchasing power parity in North Macedonia remained unchanged at 49%. Kosovo is missing from the ranking.

In the per capita income indicator, Albania ranks second to last in the region, with 35% of the EU average, improving from 37% a year earlier, moving up to second to last in the region, leaving behind Bosnia and Herzegovina (at 35% of the EU average in 2024, from 36% in 2023). Montenegro again leads with 54% of GDP, followed by Serbia (51%) and North Macedonia (42%).

Albania's improvement only in the per capita income indicator and not in the purchasing power indicator is an indicator of high prices in the country, which make Albanian citizens with the same amount of income buy less than families in other countries in the region, in addition to the fact that they are paid less than their counterparts in the region. Prices in Albania according to Eurostat are 62.9% of the EU average in 2024, the most expensive in the region, followed by Serbia (61.4%), Bosnia and Herzegovina (59.7%), Montenegro (57.9), North Macedonia (49.6%).

Other data from the countries' statistical institutes show that the average salary in Albania in 2024 was 770 euros, while in other countries in the region it exceeded 1,000 euros per month.

According to Eurostat's explanation, although GDP per capita is an important and widely used indicator of the level of economic well-being of countries, consumption per capita may be more useful for comparing the relative well-being of consumers in different countries.

In 2024, actual individual consumption (AIC) per capita, expressed in purchasing power standards (PPS), ranged from 72% to 141% of the EU average across the 27 European Union member states.

Nine European Union countries recorded an actual individual consumption (AIC) per capita above the EU average. The highest levels were recorded in Luxembourg (41% above the EU average), the Netherlands (20%) and Germany (18%).

Meanwhile, eighteen EU countries recorded an AIC per capita below the EU average, with the lowest levels recorded in Hungary (28% below the EU average), Bulgaria and Estonia (26%).

Larger differences in GDP per capita than in actual individual consumption

Gross domestic product (GDP) per capita, an indicator of economic activity, also showed large differences between EU member states. Ten countries recorded a GDP per capita above the EU average. The highest level was recorded in Luxembourg (242% of the EU average), Ireland (211%) and the Netherlands (136%).

At the other end of the spectrum, the lowest GDP per capita was recorded in Bulgaria (66% of the EU average), Greece (70%) and Latvia (71%)./ Monitor