TIRANA, December 24 – Albania recorded one of the highest economic growth rates in Europe, the International Monetary Fund said at the conclusion of the 2025 Article IV Consultation. The IMF attributed the performance to tourism, low inflation, declining public debt, and strong foreign exchange reserves.

According to the IMF Executive Board, economic growth remained stable at 3.5 percent in 2025 and 3.6 percent in 2026. The Fund said private consumption and continued support from the tourism sector drove growth. It added that the economy surpassed pre-pandemic levels due to appropriate fiscal and monetary policies.

The IMF projected inflation to rise gradually from 2.2 percent in 2025 toward the 3 percent target in the second half of 2026. It linked the trend to a tight labour market and wage growth.

Meanwhile, the Fund expected the current account deficit to reach 2.8 percent of GDP in 2025. It said the deficit would widen to around 3.5 percent of GDP in the medium term due to higher imports linked to rising incomes and public investment.

The IMF said fiscal discipline reduced public debt below 50 percent of GDP. It added that strong foreign reserves improved the country’s external position. In this context, it said the Albanian government advanced reforms aimed at European Union membership by 2030.

However, the IMF warned that risks shifted to the downside. It cited global geopolitical tensions, trade measures, commodity price volatility, and financial market instability. Domestically, it said a shrinking working-age population could intensify labour shortages and inflationary pressures.

To preserve macroeconomic stability, the IMF stressed the need for timely domestic reforms. It prioritised safeguarding fiscal buffers through sustainable revenue mobilisation, improved tax administration, modernisation of the property tax system, and higher transparency and quality of public spending.

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