The European Bank for Reconstruction and Development (EBRD) expects Albania’s economy to grow 3.5% in 2025 and 2026, according to its latest Regional Economic Prospects report.

In 2024, services—especially tourism—and construction drove the economy, pushing growth to 4%. Industrial and agricultural production fell. Private consumption and public investment fueled growth, while weaker demand from European partners and an overvalued lek reduced goods exports and widened the current account deficit.

Average inflation fell to 2.2% in 2024 from 4.8% the previous year. This drop allowed the Bank of Albania to cut the key interest rate to 2.75%. The financial sector stayed stable and increased credit activity.

The report notes that structural reforms, EU integration efforts, and potential new EU funding could boost growth. However, risks remain: weaker eurozone demand, lower remittances, and a slowdown in tourism. Dry weather may reduce energy production, but rising renewable energy output could offset this impact.

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