Strong GDP growth reduces poverty in Albania-study

TIRANA, April 23 (Reuters) - Strong economic growth has helped lift more than one third of the poorest Albanians out of poverty in the past three years, the World Bank and the United Nations said on Thursday.

A study carried out by the World Bank, the U.N. Development Programme and the Albanian Statistics Institute showed that in 2008, '12.4 percent of the population was poor compared with 18.5 percent in 2005 and 25.4 percent in 2002.'

'This means that about 200,000 people out of the roughly 575,000 poor in 2005 have been lifted out of poverty between 2005 and 2008 alone,' it said.

The Balkan state of 3.2 million people was Europe's most isolated country, and one of its poorest, under Stalinist dictator Enver Hoxha who died in 1983, but it is now a member of NATO and is eager to apply for European Union membership.

The study, the Living Standard Measurement Survey, was carried out just before the onset of the world economic crisis.

'This progress is a testament to the entrepreneurial spirit of the Albanians who have taken every advantage, here and abroad, to improve their lives through hard work, savings and investments,' said World Bank country manager Camille Nuamah.

Nuamah praised the political leadership of both the ruling Democratic Party and the previous Socialist Party administration for having 'forged forward with, often difficult, structural reforms'.

Prime Minister Sali Berisha's government, which faces a general election on June 28, saw the reduction in poverty as a result of its policies of increasing public investments and raising wages and pensions. The last wage rise is due on May 1.

'Albania's high real GDP growth over the past 11 years, averaging 7.1 percent per year since 1998, along with an average increase in real terms of wages and pensions, has contributed to these results,' the study added.

As a result, average real consumption per capita has increased by about 7.0 percent since 2005, the study found.

Poverty was defined as having less than Lek 5,722 (44 euro) per capita per month in 2008, or Lek 4,891 (37.6 euro) per capita per month in 2002.

Like almost all other countries, Albania faces harder times ahead as a result of the global economic crisis. The International Monetary Fund has forecast its GDP growth will fall to 0.4 percent this year from 6.8 percent in 2008.

(Reporting by Benet Koleka, editing by Tim Pearce) Keywords: ALBANIA POVERTY/

(E-mail:benet.koleka@reuters.com, +355 4 2229824/8, ReutersMessaging:benet.koleka.reuters.com@reuters.net)

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