How much risk does Albania have from earthquakes? World Bank: GDP per capita will decrease by over 15% by 2050
Of all natural disasters and potential shocks, earthquakes are predicted to have the greatest negative impact on the Albanian economy.
According to the latest World Bank report, published in November last year, potential earthquake shocks are projected to reduce GDP per capita by 6 percent by 2030, 11.55 percent by 2040, and up to 15.69 percent by 2050.
The predictions are made in the context of the negative impact that climate change is expected to bring to our country.
It is also highlighted that earthquake damage would generate a larger decline in the current account deficit, to about 3 percentage points of GDP by 2050.
The report notes that potential damage from earthquakes could create emergencies that could put additional pressure on public finances and could affect important spending in more traditional areas such as health and education.
According to the document, among European countries, Albania has one of the highest levels of disaster risk and exposure to earthquakes, floods, landslides and forest fires, which have affected 95 percent of Albanian municipalities in the last two decades.
In September and November 2019, Albania was hit by two powerful earthquakes with magnitudes of 5.6 and 6.4, respectively. According to the World Bank, the November earthquake caused damage of US$1.1 billion, equivalent to 6.4 percent of 2018 GDP, and losses equivalent to another 1.1 percent. The city of Tirana, Albania’s main economic growth engine, and Durrës, a central tourist hub, were particularly hard hit.
Meanwhile, from 1995 to 2015, earthquake damages in Albania are estimated at around 27 million dollars, which include 162 events.
The World Bank emphasizes that although recent steps have been taken to reduce disaster risk and create more integrated insurance schemes, Albania still has few pre-established risk financing instruments.
To respond to disasters, which currently exceed an average of $130 million per year, the country relies on budget reallocation, after-the-fact borrowing, and donor assistance.
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