Poverty and inequality are complex and widespread phenomena. Poverty is an indicator and the main factor of inequality, so reduction of poverty is one of the biggest challenges for economic and social consolidation of a country. There are different concepts of poverty, in this paper we are focused on the concept of absolute poverty. The main objective of this paper is to conduct an analysis on the trends of poverty and inequality indicators, as well as an analysis on the reduction of poverty in Albania between 2002 and 2008.