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As in no other country in Europe, in Albania it is just built endlessly. Construction, year after year, is turning into a weighty sector in the domestic economy.
A considerable part of the free funds in the economy are oriented in this sector mainly in residential apartments in Tirana and hotels on the coast.
These developments have made Albania with the highest share of construction in the economy in relation to the whole of Europe, according to data published by Eurostat for the share by sectors in gross value added. According to Eurostat, construction in 2020 accounted for about 10.4% of the economy, almost twice as high as the European Union average of 5.6%.
The order after construction seems to be a typical Albanian phenomenon. After Albania, Kosovo was second with the highest share of construction in the economy with about 9.3% of the total. In third place is Iceland (7.8%), followed by Finland (7.5%) and Lithuania (7.3%). From other countries in the region, Montenegro has a high level, with 7.3% of the total economy. In Northern Macedonia and Serbia, this share is 6.5%.
In neighboring countries such as Greece and Italy, which have the economy backed by tourism, construction occupies a very low share, respectively 1.9% (lowest in Europe) and 4.4% (third lowest in Europe).
Eurostat data show that even in 2020, when the economy was plunged into crisis by the pandemic, construction in Albania continued at a high pace. The share of this sector in gross value added increased by 0.6 percentage points, the highest expansion in Europe, along with Romania.
Other INSTAT data show the momentum of construction in the country, especially in the capital, is expected to continue at least in the medium term, as a result of the numerous building permits that are still being issued.
According to INSTAT data, for the 9 months 2021, the area of construction permits issued in Tirana was 1.25 million m2, with an increase of 65% compared to the same period a year ago, when the country was suffering the consequences of pandemic.
The area of permits issued in January-September 2021 is approaching the highest record of more than a decade, which was reached in 2019, being only 4.5% lower.
In the third quarter 2021, the area of permits issued in the capital was 435 thousand square meters, the record of this year and the highest since the third quarter 2019.
According to INSTAT, the approximate value of construction permits approved for buildings and engineering works in Tirana for the 9-month period is 43.6 billion ALL, or 355 million euros.
Experts have often argued that the momentum of construction is not justified by the real income of the economy and is being financed in part by informal sources. Moreover, the run towards construction in the medium and long term does not bring any added value to the economy.
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