Despite optimism about Albania’s economic growth, World Bank warns of human capital challenges

While Albania is experiencing positive economic growth and development trends, the World Bank’s latest regional report highlights critical challenges in education and healthcare. These issues threaten to undermine the country’s long-term potential by limiting the productivity and well-being of its population.

Why is this important: Human capital—measured by the skills, health, and knowledge of a population—plays a key role in sustainable economic progress. If education and healthcare systems remain underdeveloped, Albania’s ability to achieve long-term growth and compete with regional and EU peers may be compromised.

Key issues: healthcare and education deficiencies: The World Bank report highlights healthcare and education as two critical sectors where Albania faces significant challenges, both of which threaten the nation’s long-term growth by reducing workforce productivity and weakening human capital development.

Healthcare,  a growing concern: The World Bank points out that health challenges are on the rise across the Balkans, including in Albania, impacting workforce productivity. Chronic diseases, obesity, and high smoking rates are major factors behind these problems.

• Obesity: In Albania, 22.3% of adults are obese, slightly below the regional average of 23% but well above the EU’s 17%.
• Smoking: Smoking prevalence in Albania is 28.9%, exceeding the Balkans’ average of 26% and the EU’s 21%.
• Gender Disparities: Men in Albania exhibit higher smoking and alcohol consumption rates than women, contributing to uneven health outcomes.

The growing burden of preventable diseases weakens labor productivity, reducing the effectiveness of Albania’s workforce and limiting its economic potential.

Education, falling behind: Education is another key area where Albania faces significant challenges. Results from international assessments indicate that Albania’s students, along with those in Kosovo and North Macedonia, rank among the lowest in the region. Higher education quality is also a concern:

• University Quality: The average quality score for universities in Albania is 8.7 on a 0–100 scale, far below the averages for ECA countries (12.5) and the EU (28.8).
• University Graduates: Only 29% of Albanians aged 30-34 hold a university degree, compared to 33% in ECA countries and 43% in the EU.

The World Bank stresses that improving higher education quality is essential for Albania to transition towards a high-income economy. If these deficiencies remain unaddressed, the country may struggle to foster innovation and attract foreign investment.

What’s next: Although Albania’s economic growth is encouraging, unresolved issues in healthcare and education could limit the country’s long-term potential. To maintain its development momentum, Albania must prioritize improving human capital. Without targeted reforms, the country risks falling short of achieving sustainable progress and regional competitiveness.