Economic growth continued to remain weak in the second quarter of the year, reflecting weak consumption, despite the increase in the number of tourists.

Albania's gross domestic product (GDP) grew by an annual 3.23% in the second quarter of 2023, after increasing by 2.72% year-on-year in the first quarter, the country's office of statistics said on Friday.

On a quarterly comparison basis, Albania's economy shrank by 0.44% in the April-June period, the statistical office, INSTAT, said in a quarterly report.

In the second quarter of 2023, the main contributors to the country's economic growth were the construction sector, which expanded by 14.61%, followed by other service activities at 12.37%, real estate at 11.72%, and information and communication at 8.14%. In 2022, Albania's GDP grew by 4.84% after increasing by 8.54% in 2021.

Similar to the first quarter, construction and real estate are continuing to boost economic growth. In contrast, two important sectors of the economy's productivity, agriculture and industry, are declining.

According to INSTAT, in the second quarter of 2023, the branches that made a positive contribution to the economy were construction with 1.43 pps, real estate activities with 0.72 pps, public administration, education and health with 0.66 pps, arts, entertainment and recreation; other service activities with 0.26 pps, information and communication with 0.26 pps, trade, transport, accommodation and food service with 0.19 pps, financial and insurance activities with 0.09 pps.

On the other hand, the group industry, energy, and water contributed negatively to the economy with 0.31 pps, professional activities and administrative services with 0.27 pps, and agriculture, forestry, and fishing with 0.03 pps. Net taxes on products contributed positively by 0.23 pps.

According to INSTAT, the activity of agriculture, forestry, and fishing recorded an annual decrease of 0.04%. The activity of industry, energy, and water had a decrease of 2.37% while construction activity had an increase of 14.61%.

The group of activities trade, transport, accommodation, and food service had an increase of 1.24%. The group of activities information and communication appeared with an increase of 8.14%, while financial and insurance activity recorded an increase of 3.61%.

Real Estate activity has recorded an increase of 11.72%. The group of professional activities and administrative services appeared with a decrease of 4.16%. The group of public administration, education, and health activities showed an increase of 5.26%. The group of activities arts, entertainment, and recreation, other service activities had an increase of 12.37%. Net taxes on products increased by 1.81%.

Although Albania marked a significant increase in the number of tourists in the second quarter, the consumption of the population has been weak, while that of the public administration has marked a significant increase, while in the second quarter, there was an increase in wages, while local elections also took place.

The main components of GDP by the expenditure method, for the second quarter of 2023, compared to the second quarter of 2022, are shown as follows: the final consumption of the population, which constitutes the main share of expenses in the economy, increased by 4.03%, the final consumption of the government increase by 9.29%, the component of gross fixed capital formation increased by 11.05%, while exports of goods and services decreased by 1.48%, while imports of goods and services increased by 2.42%.