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Why the Prime Minister should not be trusted when he talks about economic growth!
2026-04-12 16:35:16 / IDE
In the Prime Minister's political speeches, GDP is held up as the main indicator of national success. GDP is growing, and this, according to the Prime Minister, also means that the economy is doing well. GDP growth for the government is not just a signal of success, it is the goal we should aspire to, because GDP growth means more progress, more jobs and more prosperity.
The government is so obsessed with GDP growth that it is ready to measure it not only in euros but also in Turkish liras to make it appear not twice but 14 times larger.
But what does GDP (or Gross Domestic Product) actually measure? GDP summarizes or counts all monetary transactions carried out within a year in the economy. GDP does not indicate whether these transactions are good or bad, useful or harmful, necessary or not. So, by definition, GDP collects everything we spend money on: building a hospital, cleaning an irrigation canal, buying an apartment, paying lawyers in court disputes, or treating a tumor - all of them count as economic activity.
In this context, GDP is a better measure of costs than benefits.
Judging the health of the economy by GDP is like judging the health of a car by how much you spend on car maintenance - if you spend €3,000 on car engine repairs this month, GDP reads this transaction as positive.
Or in a society where people get sick more often from pollution or stress, medical costs increase, so does GDP. But are people better off? For example, in 2012 health spending per capita was $354; today it is about $760.
So, GDP growth shows increases in the revs of the economic engine, but it doesn't tell us how well it's working, whether it's overheating, or whether it's destroying its component parts faster than we can replace them.
GDP also leaves out some of the truly important parts of any society’s real wealth: healthy ecosystems, clean air and water, family time, citizens’ mental health, education, biodiversity, community trust, and safety. None of these are counted in GDP. When we reduce protected areas for Ivanka Trump’s resorts, or reduce green spaces to build towers and resorts, GDP increases, but this kind of GDP growth can easily mask real declines in well-being, even in sustainability.
Although the Prime Minister continues to use GDP growth as the scoreboard for “Reborn Albania,” the reality is much more nuanced. GDP only measures economic movement, not direction, not quality, and certainly not sustainability. It collects transactions, but it doesn’t ask what we are gaining or losing in the process as a society. So GDP growth is a weak instrument, it is not a measure of progress but a speedometer without a map.
Two facts of economic growth without transformation!
The Economic Complexity Index compiled by former Prime Minister’s advisor Ricardo Hausmann reveals that the economic growth experienced in Albania has not driven transformation. Production remains low and superficial, and has been steadily declining in recent years. Albania’s integration into global value chains is concentrated in low-value segments with very limited effects on the creation and diffusion of knowledge, as well as well-paid jobs.
In 2025, Albania ranks 75th in the Economic Complexity Index (ECI), placing it in the below-average category in terms of complexity. Our economy has the lowest complexity compared to Western Balkan countries such as Serbia, which ranks 40th, or Bosnia and Herzegovina, which ranks 37th. Albanian exports have modest quality and technological classification, reflecting an urgent need to improve the export base.
Another fact that is perhaps too complicated to explain to the Prime Minister who boasts about economic growth without transformation is the expansion of the money supply twice as much as economic growth. This expansion overvalues assets, mainly real estate, turning construction not into a source of development but into a shock absorber to absorb the increased money supply.
These lines, although they seem to be addressed to the Prime Minister, are not for him. Referring to the growth of GDP while emptying it of its meaning and corrupting it with myths and half-truths is nothing more than a way to justify and cover up the great damage that has been caused.
These lines are for the public because as Goethe says: "the truth must be repeated constantly, because when lies are preached all the time, they turn into conviction for the crowd."
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