Informal economy in Albania

Drilona MULAJ, Brunilda DURAJ & Greta NDREU

The main purpose of this paper is to evaluate the level of the informal sector in Albania’s economy, to analyze factors that favor the emergence and development of this phenomenon as well as a comparative analysis with the countries of the region, concluding with some recommendations on how to mitigate and keep the scope of the informal economy under control by the relevant institutions in our country. The informal economic sector, is a serious threat to economic development and the integration aspirations of countries in transition. Through a questionnaire, I presented the perception of individuals for the level of informal economy and some related factors, and found out that the informality still remains to a large extent percentage of GDP, but unlike other studies, I found lower rates, may be because of the reforms and formalization processes undertaken by the Albanian government. The existence of the informal sector in the Albanian economy has been and still considered a serious challenge to be faced by the government. And in order to reduce its size and mitigate its consequences in the economy, some specific measures should be taken in this regard.