FLASH NEWS
Final consumption of the population grew only 2.7% in 2025, the lowest level since the pandemic
2026-03-26 18:46:23 / EKONOMI&SOCIALE
Today's INSTAT data on Gross Domestic Product showed that the population's final consumption increased by 2.77 percent last year, the lowest level recorded since the year of the pandemic in 2020 (see chart below).
The final consumption of the population is closely linked to demographic developments. On January 1, 2025, the country's population fell by 27 thousand people or -1.2% compared to the previous year, while the young age group 0-29 years old shrank by three times, -3.7 percent. Retailers claim that the decline in young people has a strong impact on sales, as they are large consumers of drinks, pastries, but also clothing, unlike older ages who have a completely different shopping structure.
Household consumption data is strongly linked to demographic factors, as well as economic cycles. In the golden period of growth from 2000 to 2008, household consumption grew many times faster than the economy, driven by rising wages, pensions and bank credit. The country's population still maintained a strong base of young age groups, which are now a minority in relation to the general population.
Along with the declining population, high food inflation appears to be eroding purchasing power. While wages may have increased nominally, the cost of living, especially food and rent, is eating up the vast majority of household budgets, leaving little room for additional consumption.
The Albanian economy has suffered from a weak link between economic growth and employment and consumption growth. Historical data shows that the economy has grown continuously but employment has often declined, while consumption in recent years has been lower than economic growth.
The exchange rate has also played a role in curbing consumption growth. Many Albanian families depend on remittances (money sent by emigrants) or work in sectors that are paid in Euros. With the sharp decline of the Euro against the Lek, these families have less purchasing power today than two years ago. Although many Euros come in from tourism, the appreciation of the Lek has meant that those Euros buy fewer products in the domestic market./ Monitor
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