Albania dropped five spots y/y to 81st in the 2019 Global Competitiveness Report of the World Economic Forum. The ranking included 141 countries worldwide in total.
Albania ranked the highest, at 38th place, in the labor market pillar, as well as in the health and skills pillars. On y/y basis, its performance in the infrastructure, ICT adoption, skills, labor market, financial system and market size pillars improved. Albania’s banking system stability was seen as improving as the share of non-performing loans decreased, soundness of banks improved and crediting to private sector was on the rise. In terms of market labor, the sub-indexes regarding higher pay and productivity, cooperation in labor-employer relations, labor mobility improved y/y. Despite some improvements, Albania ranked lowest in the market size, financial system and macroeconomic stability indicators.
On annual basis, performance worsened in the institutions, healthcare, product market, business dynamism and innovation capability segments. A concerning deterioration y/y was registered in all indicators included in the institutions pillar, such as security, social capital, check and balances, public sector performance, transparency, property rights and corporate governance, which we think might have been related to the domestic political crisis and a number of revelations about ties between organized crime and government officials. The worsening performance y/y in the business dynamism was the result from lower growth of innovative companies and worsening attitude to entrepreneurial risk.