Albania’s economy is on track to grow 3.8% in 2025, with private consumption and a strong tourism season driving the recovery, according to the European Commission’s latest report.
The Albanian economy posted a solid 4.1% growth in the first half of 2024, largely thanks to a boost in private spending. In particular, private consumption surged by 6% in the second quarter, supported by rising wages, increased access to credit, and favorable financial conditions.
Tourism also played a key role, lifting service exports, though goods exports took a hit due to weaker demand from the eurozone, falling commodity prices, and a stronger local currency. Investment levels have risen, and with public capital spending on the rise, the economy is expected to pick up further momentum in the second half of the year.
Inflation, which dropped to 1.9% in September from its previous highs, is expected to gradually return to the Central Bank’s target of 3% by 2025. Meanwhile, employment growth is expected to continue through 2026, though at a slower pace, while unemployment continues to drop.
In the first nine months of 2024, government revenues rose 10% year-on-year, supporting a fiscal improvement that saw the budget deficit fall to 1.3% of GDP in 2023.
While experts remain cautiously optimistic, they note that emigration and global market fluctuations could pose challenges to long-term stability.
