With salary, you can buy less and less, purchasing power falls by 170 euros from 2020 to 2026

Salary growth in Albania continued the positive trend in nominal terms, but when adjusted for inflation, the real wage for employees remains significantly lower.

Official data from INSTAT show that the gap between nominal and real wages has widened significantly year by year, reflecting the continuous pressure of prices on incomes.

In the first quarter of 2026, the average gross monthly salary reached 90,119 lek, with an annual increase of 9.6%. Over five years, the nominal salary grew by 60%.

But the same salary, measured in real purchasing power, amounted to 73,822 lek in the first quarter of this year, with an annual increase of 7 percent.

The gap between real and nominal wages reached 16,297 lek, more than 170 euros, in the first quarter of 2026, with an expansion of about 23% from the same period of 2025.

The average gross monthly real wage is indexed to inflation (2020=100) by INSTAT. This means that with around 90 thousand lek, an Albanian today buys the same goods that in 2020 they could buy with about 73,822 lek.

The difference between nominal and real wages has followed an upward trajectory. At the beginning of 2021, the gap was only 1,224 lek.

This difference widened significantly during 2022, exceeding 6,600 lek by the end of the year, at a time when the economy faced strong price increases.

In 2023 and 2024, although wages continued to rise, inflation also remained an important factor, causing the gap to deepen further.

The peak of this gap was reached this year, as in the first quarter of 2026, the difference between nominal and real wages reached 16,297 lek, the highest level recorded.

This development suggests that wages are rising, but the power to buy goods and services is not following the same pace.

It seems that wage growth itself has become a cause of price increases. Wage policy in both the public and private sectors has not been supported by productivity factors but by pressures in the labor market and by strong emigration of workers.

Wage increases have put pressure on consumption growth while domestic production has not followed the same trend, becoming a cause of inflation.

In these developments, pensioners are being hit hard, for whom no other policies are applied except indexing to average inflation. / Monitor