Albania began its transition from a centrally-planned economy to a market driven economy in 1992, after GDP had collapsed by over 50% in 1989. The government elected in 1992 set in motion a series of aggressive economic reforms to light the path towards a market economy. Among the reforms were price and exchange regime liberalization, fiscal consolidation, monetary restraint, and a rigid income policy. Stalling progress in 1997 was followed by a resumption of growth the next year.

The US Central Intelligence Agency (CIA) estimates that in 2002 Albania's central government took in revenues of approximately $697 million and had expenditures of $1.5 billion including capital expenditures of $368 million. Overall, the government registered a deficit of approximately $803 million. External debt totaled $784 million.