Finance Ministry unveils Albania’s 2025 budget
The Albanian Ministry of Finance has recently unveiled the proposed budget for 2025, projecting economic growth of around 3.9%. The budget outlines an ambitious agenda with a strong focus on domestic demand, increased private consumption, and strategic infrastructure investments. With an emphasis on boosting public revenue and minimizing economic informality, the budget aims to support the country’s development through targeted public spending and increased investment, particularly in key sectors such as tourism.
Why does it matter: The 2025 budget is crucial not only for sustaining Albania’s economic growth but also for aligning with the National Strategy for Development and Integration (NSDI) 2021-2030. By prioritizing infrastructure projects, digital transformation, education, and rural development, the budget aims to bolster the country’s competitiveness and accelerate its integration into the European Union. As Albania seeks to enhance fiscal stability, the focus on reducing public debt and budget deficit is vital for attracting foreign investment and fostering long-term prosperity.
The total Albanian government revenues for 2025 are projected to reach 754.6 billion ALL, constituting 28.8% of the GDP. This estimate reflects a revenue increase of 40.6 billion ALL compared to the revised plan for 2024. The growth in public revenue is attributed to better fiscal administration and efforts to reduce informality in the economy. Meanwhile, budget expenditures are set at 822.7 billion ALL, approximately 31.4% of the GDP, representing a rise of 51.4 billion ALL from the previous year. This increase is mainly directed towards strategic investments, particularly those that align with EU Growth Plan initiatives.
Public investments in 2025 are planned at 161.8 billion ALL, equivalent to 6.2% of GDP. These investments aim to support significant projects in infrastructure, transportation, digitalization, healthcare, and education. The government envisions an average public investment rate of 6.1% of GDP between 2025 and 2027, emphasizing projects with strategic importance. These investments are expected to improve national competitiveness and stimulate further economic growth by fostering connectivity, innovation, and improved service delivery across sectors.
The budget deficit for 2025 is expected to be 2.6% of GDP, with plans to gradually decrease it to 1.4% by 2027. Similarly, public debt is forecasted to drop from 56.3% of GDP in 2024 to 55.8% in 2025. The government’s broader fiscal strategy aims to further reduce public debt to 48.5% of GDP by 2031. These measures are designed to ensure fiscal sustainability and comply with the country’s fiscal rules, strengthening Albania’s economic resilience and supporting its EU accession goals.
Go deeper
EU allocates €13 million to modernize Albania’s ground forces
Published on December 18, 2024
Why is this important: Since joining NATO in 2009, Albania has increased its defense budget but remains below the 3% GDP benchmark required by the alliance for member states. International financial support, such as this EU grant, is essential for strengthening Albania’s defense capabilities. This agreement is particularly significant as the EU appears open to funding additional defense and security projects proposed by the Albanian government, with potential approvals expected next year.
Albania to relaunch defense industry in 2025
Published on December 14, 2024
Why is this important: Reviving Albania’s defense industry marks a significant step toward increasing self-sufficiency and creating economic opportunities. By producing munitions and uniforms domestically, the government aims to reduce reliance on imports and generate revenue through partnerships with private companies. This initiative aligns with NATO practices and will allow Albania to modernize its defense infrastructure while addressing the longstanding issue of uniform production for its military and uniformed agencies.
Albania’s Hospitality-Tourism High School adopts Swiss-certified curriculum
Published on December 12, 2024
Why is this important: The sharp rise in tourist numbers over the past five years has highlighted a pressing need for skilled workers in Albania’s hospitality and tourism sectors. While demand for high-quality services remains unmet, business owners in accommodations, bars, and restaurants face labor shortages. To address this, the government has been promoting vocational education as a career path for youth, encouraging them to join professional schools to fill this gap.