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Following robust economic expansion in recent years, real GDP growth in Albania is projected to moderate to 3.6% in 2025 and 3.5% in 2026 and 2027, while remaining supported by domestic demand. Inflation is expected to gradually pick up towards the central bank’s 3% target amid steady wage growth. The general government deficit is forecast to widen to 2.2% of GDP in 2025 and remain close to 2% in 2026-27, while the gross public debt ratio is projected to continue declining, reaching about 52% of GDP by 2027.
| Indicators | 2025 | 2026 | 2027 |
|---|---|---|---|
| GDP growth (%, yoy) | 3.6 | 3.5 | 3.5 |
| Inflation (%, yoy) | 2.4 | 3.0 | 3.1 |
| Unemployment (%) | 8.5 | 8.4 | 8.3 |
| General government balance (% of GDP) | -2.2 | -1.9 | -1.7 |
| Gross public debt (% of GDP) | 53.6 | 52.9 | 52.1 |
| Current account balance (% of GDP) | -2.6 | -2.7 | -2.7 |
Growth momentum to moderate slightly
After two years of strong growth, the economy maintained positive momentum in the first half of 2025, supported by robust private consumption and investment. For 2025 as a whole, real GDP growth is projected at 3.6%. Over 2026-27, growth is forecast to ease to 3.5% as tourism matures and external demand stabilises, while investment remains supported by favourable financing conditions, credit growth and EU-related funding. The current account deficit is projected to widen slightly compared with 2024, reflecting a larger merchandise trade deficit.
Improving labour market situation
Employment increased in 2025 and is expected to keep growing in 2026-27, albeit at a more moderate pace. Rising wages and improving job prospects are expected to support labour force participation, while emigration remains a constraint. After reaching a record low in 2024, the unemployment rate is expected to remain broadly stable, at around 8½% in 2025 and edging down thereafter.
Stable inflation in 2025 followed by a pick-up towards the 3% target
Inflation remained low in 2025, close to its 2024 level, with a gradual rise during the year mainly driven by higher food and rental prices. Domestic demand is strengthening domestic price pressures, while imported inflation remains muted due to exchange rate appreciation and lower inflation in trading partners. Average annual inflation is projected to remain below the 3% target in 2025, increase in 2026 and stabilise close to the target in 2027.
Fiscal deficit to remain close to 2% of GDP
The general government deficit is forecast to reach 2.2% of GDP in 2025, improving on the budget target. It is expected to remain close to 2% in 2026 and decline slightly to 1.7% of GDP in 2027, with the primary balance projected to remain in surplus. The gross public debt ratio is projected to continue decreasing through 2027, supported by a positive primary balance and nominal GDP growth.
Source: European Commission. European Economic Forecast, Autumn 2025.
