Albania plans to reduce its public debt in 2026 to around 53.6% of GDP, according to the government’s 2026 draft budget.

The Ministry of Finance expects debt to reach 54.1% by the end of 2025. Authorities warn that implementing the borrowing plan in late 2025 and throughout 2026 will be crucial to reach this target.

The government may extend the State Guarantee for the agricultural sector into 2026 to maximize support.

For domestic borrowing, it aims to raise 45 billion lek through long-term debt securities. This strategy reduces risk and meets local investors’ preferences.

On the external market, the government will borrow about 47 billion lek to fund priority projects and provide budget support. Net borrowing should remain near 10.3 billion lek after repayments.

Lower inflation in 2025 created room for easier monetary policy. The Bank of Albania cut the base interest rate to 2.5% in July and has kept it steady.

The draft budget projects that interest payments on domestic and external debt will stay similar to 2025 levels. External debt principal repayments are set at roughly 36.7 billion lek.