The World Bank has calculated that in 2023, Albania's GDP per capita reached $8,575, with the average daily income for a person in the country standing at $23.5. This figure is close to the global standard of $25 per day, which the World Bank defines as the minimum threshold for a dignified standard of living.
According to the latest reviews from the World Bank, more than 20% of Albania's population will live below the relative poverty line of $6.7 per day by 2024. This stark contrast between meeting prosperity standards on the one hand, and one-fifth of the population living in poverty on the other, highlights the significant economic inequality in the country.
While the economy is growing, the wealth distribution is disproportionately benefiting the wealthy, leaving the poor further behind. The World Bank established the prosperity standard of $25 per day to raise awareness about the issues of economic growth distribution. Countries need to identify the percentage of their population living below this gap and implement fair redistribution policies to address these challenges.
The World Bank monitors the shared prosperity of a country by tracking the growth of average incomes in the lowest 40% of the population. The prosperity standard of $25 per day, adjusted for differences in purchasing power across countries, is the average factor by which income should be multiplied to achieve global prosperity standards. For instance, for a person earning $2.50 per day, their income would need to be increased tenfold to meet this threshold.
The World Bank also emphasizes that Albania has untapped human capital potential that could drive further growth and development. The country faces several challenges, including migration, economic stagnation, and underutilization of talent. According to the World Bank, closing gender gaps in employment could boost Albania's GDP per capita by 12% in the long run.
The underutilization of educated individuals is also hindering productivity growth and the returns from investments in education. Ensuring better integration of human capital into the economy could provide a sustainable path toward development.