Tirana, 19 November 2024: Foreign Investors Association of Albania, Confindustria Albania, Italian Chamber of Commerce in Albania, Hellenic Business Association in Albania, presented the findings of the Business Environment in Albania Survey 2024, which was conducted during August – October 2024 with the foreign investor’s community in the country.
The main respondents of this Survey were 101 foreign businesses operating in Albania in the sectors of information and communication technologies, heavy industries & mining, energy and environment, financial services, trade, logistics, tourism, consulting services, etc.
The Survey’s findings were presented at the presence of the Head of Cooperation at EU Delegation to Albania Mr. Hubert Perr, Minister of State for Entrepreneurship and Business Climate Mrs. Delina Ibrahimaj, Deputy Minister of Economy, Culture and Innovation Mr. Enkelejd Musabelliu, along with other distinguished guests and diplomatic representatives in Albania.
The 2024 Survey findings were compared with the previous year survey’s findings. This year, the overall business climate perception is showing slight positive changes compared to the evaluation of the business climate during 2023. Specifically:
Foreign investors evaluate the current situation of doing business in Albania, with 49 out of 100 points, with an increase of 3 points when compared to 2023 (46 points), failing however to reach the mid line in the scale of favorability. When looking at expectations for the business climate in the future, a similar score with 2023, 52 points out of 100, is reached in 2024 too.
From a global as well as national macroeconomic situation, foreign investors consider “the current depreciation of Euro and its impact to their business”, as well as “the impact of the current high inflation rate” as the two more severe issues with an impact in their business, with however a slight decrease in the scale of severity, compared to the 2023 survey.
When looking at the domestic factors, business representatives believe there is an increase in the level of bureaucracy faced by their business, scoring 64 points out of 100, 21 points higher compared to 2023, with 43 points in the same scale. Up to 69% of business representatives also claim that informality is present in the sector they operate. Order and Security is the better performing dimension in this category, with 33% claiming to face issues in this regard, however with the severity of such issues, being evaluated at 61 points, out of 100 in the same scale. Additionally, over 63% of respondents believe that the government is not transparent in an adequate level towards their business.
When thinking of doing business in Albania, the Albanian political climate sees an improvement of 7 points, considered as problematic to the extent of 49 points, compared to 56 in 2023, in the scale of severity. Albanian judiciary on the other hand scores 55 points, with an increase of 12 points compared to 2023 (43 points) in the scale of severity.
The energy supply section in the 2024 survey sees an overall improvement compared to 2023, with all dimensions not surpassing the midline of severity in the scale of evaluation.
The situation emerges not very positive when assessing the tax system in the country, with only 3 dimensions, out of 9 evaluated, only slightly surpass the midline of severity in the scale of evaluation. Specifically, the “Frequency of changes of the tax legislation and practice and its impact in business” (55 points), “Relevance and clarity of rulings / interpretations issued by tax authorities and their impact in business” (51 points), “Level of inter-connectivity/ communication between the different governmental platforms / institutions” (51 points).
When looking at relationships with Albanian Institutions, even though only 1 dimension surpasses the midline in the scale of severity (Capacities of institutions, local or central, se well level of expertise of public officials, in performing their functions, with 56 points). There is a slight decrease in the overall performance in this regard, in almost all assessed dimensions.
The situation regarding the Labor Market in Albania is yet again among the least performing dimensions assessed by foreign investors, specifically while looking at the increase of salaries in the country, scoring 65 points in the scale of severity, a 21-point increase compared to 44 points in 2023. Also, while looking at the access to local skilled /qualified labor and its impact in business, with 74 points, 5 points higher compared to 69 points in 2023.
The situation regarding pro-business strategies and incentives feels “stale” at best, with foreign investors evaluating the impact of Albanian economic reforms and policies towards foreign business at 48 points (slight increase of 1 point compared to 2023), similarly to the evaluation of investment stimulating policies and incentives, again at 45 points (slight decrease of 2 points, compared to 2023).
Foreign investors do not expect any major changes in the Albanian economy next year, scoring 55 points in a scale where 0 = Weaken Significantly and 100 = Improve Significantly. This is followed with slight optimism over business turnover, expected to increase in the extent of 60 points in a scale where 0 = Significantly Decrease and 100 = Significantly Increase.
