Number of active businesses in Albania declining, only farmers on the rise

The number of active businesses in the Albanian economy amounted last year to about 161 thousand.

According to the Institute of Statistics, the number of active enterprises in the past year grew by 5.5%, but with a detail that should be taken into account: growth has come only as a result of farmers’ formalization, while the number of other entities in the economy has declined.

For 2016, the number of registered farmers amounted to over 31 thousand, up with 63% compared with a year ago.

Increasing the number of registered farmers came as a result of an increased pressure to register them as business entities, but also due to the conditionality set for have access in agriculture supportive schemes.

This has prompted a rise of the number of registered farmers from 600 that it was two years ago, to over 31 thousand at the end of 2016.

Farmers now make up about 19% of the overall number of registered businesses.

In terms of official figures, we can state that private enterprises in Albania are more driven towards agriculture, although in reality these figures are largely an effect of the formalization that has happened last year.

Meanwhile, for other subjects of business the trend is quite the opposite.

Over the past year, the number of family businesses declined, who are mainly registered as natural persons, as well as the number of larger enterprises, acting as legal persons.

The number of active natural persons for last year fell to roughly 101 thousand, 2.4% less than in 2015.

Meanwhile, the number of legal persons dropped to about 28 thousand, 3.4% less than in 2015.

For an economy that is claimed to be improving, the decline of active businesses does not seem a natural development.

One factor that may have contributed to the decline in the number of businesses is the mounting pressure for formalization. Apparently, many businesses could not survive formalization.

SCAN

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