The World Bank expects Albania’s economy to grow by 3.4% in 2026, with growth gradually strengthening in 2027–2028. Its latest report identifies domestic demand, services and construction as the main drivers of economic activity. Public debt has fallen below 50% of gross domestic product (GDP).

Strong labour demand has helped reduce unemployment to a historic low. Wages continue to rise, while poverty has declined further. The financial sector remains stable, with strong lending growth and low levels of non-performing loans. However, food and fuel prices, higher rents driven partly by tourism, and rising wages have pushed inflation upwards.

Public finances have improved, with a fiscal surplus recorded in the first half of 2026. Higher foreign investment, increased foreign exchange reserves and a narrower current account deficit have also strengthened the country’s external position.

Despite these gains, the World Bank identifies structural challenges. Albania relies heavily on seasonal tourism and services, while its export base remains narrow. The report estimates that trade reforms could increase GDP by up to 10% over the medium term. It recommends reducing regulatory and administrative barriers, lowering business costs and diversifying exports.

Looking ahead, the World Bank expects growth to strengthen gradually in 2027–2028. Progress towards European Union membership, higher productivity, stronger private investment and broader exports could improve the outlook. However, global uncertainty, demographic pressures and climate risks remain significant challenges.

/a.p./