Albania Moderately free The Wall Street Journal and Heritage Foundation have published the Index of Economic Freedom report for 2014 and Albania is ranked 25th among 43 countries in the European region, while in the global classification Albania stands above the world average, at 54th spot.
According to the report, a weak point for the economic freedom is the fight against corruption and the property rights.
Albania has 66.9 points in the classification with 100 points of the Economic Freedom Index for 2014, ranked 54th in the world. Albania is ranked 25th among the 43 countries in the Europe region, and its overall score is above the world average.
According to the report, Albania’s economic freedom score is 66.9, making its economy the 54th freest in the 2014 Index. Its overall score has increased by 1.7 points, with notable improvements in investment freedom and trade freedom.
With score increases in nine of the 10 economic freedoms, Albania has risen gradually into the “moderately free” category, but still having problems in the property rights category.
According to the report, notable structural reforms have included trade liberalization, privatization, implementation of competitive flat tax rates, and modernization of the regulatory environment.
However, the report says that as regards the law implementation, the judiciary remains subject to political interference, and deeper institutional reforms to eradicate lingering corruption and increase judicial independence are critical to ensuring greater economic freedom in Albania.
weak regulatory environment, opaque government procurement rules, a culture of impunity, and political interference make it difficult for the judiciary to deal with high-level and deeply rooted corruption in Albania.
The report says that protection of intellectual property rights is weak, and Albania still lacks a clear property rights system, particularly for land tenure. Along with the effective maintenance of low inflation, greater monetary stability has also been achieved.
The report goes on by saying that the rising fiscal deficits in recent years have increased public debt to above 60 percent of GDP, the legal limit set in 2008. Government expenditures stand at 28.5 percent of GDP. The slowing domestic economy has put internal pressures on public finances, pushing up public debt to 61 percent of Gross Domestic Product.
According to the report, Albania’s average tariff rate has improved significantly from 5.1 percent to a relatively low 1.3 percent. The country officially welcomes foreign investment, but red tape and insufficient protection of property rights discourage investment. The financial system remains relatively well-developed and stable despite the challenging external environment. The banking sector is well-provisioned, but the share of non-performing loans has been rising.
Albania classification has risen with 1.7 points compared to one year ago, with visible improvement in the commerce and investment freedom.