Survey: Increased cost of living, the main concern of Albanians

2025-01-25 10:26:00, Ekonomi CNA

Improving personal finances and taking care of health were the main objectives for this year for most of the 504 participants in a survey that “Monitor” conducted regarding the expectations of citizens and businesses. About 67% of them claimed that the financial situation in 2024 had not changed, or was worse than in 2023. Respondents chose more than one challenge they had overcome for 2024. For the majority, 74%, “increased cost of living” was the main concern. 17.8% of businesses claimed that they will go bankrupt and reduce activity in 2025, while 29% claimed that they will expand.

Above-average economic growth and, on the other hand, population reduction are not helping Albanians escape the trap of a weak economy.

High living costs and improving personal finances remain fundamental challenges for a large portion of educated and stable Albanians.

A survey by "Monitor", conducted during December, where 504 people were surveyed, found that for 67% of them, their financial situation last year had not changed or was worse than in 2023.

Only 32% claimed to be in a better financial situation. The survey was conducted online, through the ECR (Engaged Citizens Reporting) platform.

The sample is random and does not constitute a scientific finding.

Over 17% claimed that the financial situation in their families was very bad and for the majority, nearly 74%, the increased cost of living was the main challenge of the past year.

Of the survey participants who owned businesses (45 in total), 20% stated that the performance of 2024 was very poor, compared to 6.7% who stated that it was very successful.

The majority of businesses, 42%, are mostly aiming for stability this year and 29% of them are aiming for further expansion.

The economic situation and health are the most influential issues this year among respondents.

Cost of living, the main concern in 2024

High living costs were the main concern of citizens in at least four surveys that "Monitor" conducted through open calls that mainly focused on economic developments.

What remains worrying is the fact that the poor economic situation is stressful for middle-class families and those with professions that provide above-average incomes.

A group of people, almost all with higher education and scientific degrees, respond to the "Monitor" surveys. In the latest survey that addressed citizens' engagement for the end-of-year holidays, there were questions about the challenges that individuals and families have overcome and that await them.

Respondents chose more than one challenge they had overcome for 2024. For the majority, 74%, “increased cost of living” was the main concern along with the other challenge, which nearly 54% of participants claimed they had not been able to save.

For 63%, the increase in prices of basic products, such as food, fuel, etc., was a challenge, and family debts were a challenge for 11% of participants.

Recent “Monitor” surveys have revealed that Albanian families are increasingly unable to afford the costs of raising children. High fees for preschool and after-school educational services are making raising children increasingly difficult financially.

The inclusion of women in the labor market has increased the need for paid care in the family. Labor shortages and high needs for childcare have increased the prices of services, making it difficult for families raising children to make ends meet.

More than 20% of respondents stated that last year, their biggest challenge was meeting family expenses such as education and extracurricular activities such as courses, etc.

Economic-related issues were a major concern for everyone. Given that respondents could name more than one challenge they faced in 2024, 23.6% of them stated that income uncertainty was a challenge, while for 18%, paying monthly rent and mortgage payments was a challenge.

"The cost of living has become very expensive. The increase in rents and loan installments has had a negative impact. On the other hand, the decline in foreign currencies EUR and USD has eroded savings," says a business representative from Durrës.

Over the last three years, the country's economy has grown above the average of the past decade and, on the other hand, the country's population has decreased by over 420 thousand inhabitants between 2011-2023, according to Census data.

However, economic growth is remaining stagnant, as its distribution is not being done fairly across the entire population.

Other official country indicators bear this out. More than 1 million Albanians suffer from a severe form of poverty, according to the latest INSTAT data that measured income and living standards in 2023.

According to the latest results, Albania had 42.1% of residents suffering from a severe form of poverty.

Over 1 million Albanians live in families that cannot afford at least 7 out of 13 categories of material deprivation (6 categories related to deprivation at the individual level and 7 categories related to deprivation at the family level).

According to European parameters (Eurostat), an individual is considered poor if they do not have the opportunity to have an internet connection, to replace old clothes with some new ones, to have two pairs of shoes that fit properly (including one pair of shoes for all seasons); to spend a small amount of money each week on themselves, to have the opportunity to have regular leisure activities and to meet friends/family for a drink/meal at least once a month.

According to INSTAT, more than 42% of Albanians do not have this opportunity, confirmed by all "Monitor" surveys.

The challenges become diverse

Rapid urbanization, demographic changes, the burden of disease, and some specific economic developments have increased the burden of challenges for citizens.

For example, some respondents claimed that the biggest challenge of the past year was the inability to buy a house, for some it was the falling exchange rate. The depreciation of the Euro against the Lek has eroded the income and profits of businesses and individuals who have income in the EU's common currency.

High health care costs are a challenge for a small portion of individuals, while corruption was the biggest concern last year for a small portion of respondents.

Issues such as family conflicts over property development were concerns.

High fines, fees, and service taxes from e-albania were a challenge for two respondents.

"The government should increase pensions, because we can't afford it," says a pensioner from Korça.

There are also those who are tired of city life. Bardhi from Tirana says he aims to build a "remote" life, to break away from the jungle of Tirana and has as his motto: "Work, live, produce everything yourself."

20% of businesses assess 2024 poorly, 37.8% successful

The country's economy faced some somewhat extreme developments in 2024. On the one hand, the continued decline of the Euro created chain bankruptcies throughout the export industry, especially in the fashion sector, due to a decline in demand from abroad, and on the other hand, businesses that were related to tourism further expanded their activity due to the increase in the number of visitors to the country.

Of the businesses that participated in the survey (45 in total), 20% stated that 2024 was weak or very weak. 31.5% stated that it was a successful or very successful year, and 42% rated the performance of their activities in 2024 as average.

To the question "Has the economic situation in the country affected your business this year (business)", over 62% claimed that it has had a negative and very negative impact, 22% claimed not at all and around 13% said that it has had a positive impact.

17.8% of businesses plan downsizing and bankruptcy

Business stability, i.e. maintaining activity performance at the level of 2024, is the main expectation of businesses for 2025.

42% of them chose maintaining current stability as their main expectation this year. Unexpected risks occurring in external and internal markets such as wars, climate impacts, and unexpected events have increased uncertainty for businesses.

Therefore, maintaining the stability of activity is considered a key achievement for this year.

A large percentage of businesses, 17.8%, claimed that they will go bankrupt and reduce activity in 2025. 6.7% of businesses that participated in the survey claimed that they will close their business this year, while 11% of them will reduce activity.

Another 11% do not feel confident about this year's developments and about 29% stated that they will expand further.

Improving personal finances, the main objective in 2025

Economic issues and especially improving personal finances are a fundamental objective of the 504 individuals and businesses that participated in the survey.

The results showed that 254 people, 50.3% of respondents, think that the issue that will most impact their lives in 2025 is "economy and personal finances", while "personal health" was the most influential issue in 2025 for 16.8% of respondents.

Better social and family relationships were the most important issue that could impact their lives in 2025 for 16% of respondents, while for 14%, career and professional achievements will have the most impact this year.

For a minority, the issues that could have the most impact this year are wars, parliamentary elections, and faith in God.

2025, optimism prevails

Optimism prevails over pessimism in 2025. About 42% of respondents stated that they feel optimistic and very optimistic and only 18% pessimistic and very pessimistic.

A significant portion of respondents, around 40%, have a neutral stance on levels of optimism this year.

To the question "Are you optimistic about the coming year?" (business and individual), 39.9% responded neither pessimistic nor optimistic, 34.5% said optimistic, 11.9% slightly pessimistic. 7.7% said they feel very optimistic and 6% of respondents said they feel very pessimistic.

Main objectives, economy and health

Respondents were able to choose more than one goal for this year, so most of them chose improving personal finances and taking care of their health.

For 75% of respondents, improving personal finances was one of the main objectives for this year, while for 56% of them, improving health and well-being.

Other objectives such as creating new relationships were the most important objective for 14.7% of respondents for 2025, while travel and new experiences were an important objective for 33% of respondents.

For some others, the main objective for 2025 was leaving the country, listed by participants in the "other objectives in 2025" option.

Some considered mental peace and low stress levels to be very important. Moving from Tirana to another city was an objective for one participant./ Monitor Magazine