EBRD maintains Albania’s economic growth forecast at 3.5%

The European Bank for Reconstruction and Development (EBRD) has kept its growth forecast for Albania unchanged at 3.5% for both 2025 and 2026. The decision signals confidence in the country’s macroeconomic stability despite internal and external challenges.

Why is this important: A stable 3.5% growth outlook reflects confidence and supports Albania’s long-term fiscal trajectory. It also suggests the economy is well-positioned to navigate risks such as slowing demand in the Eurozone and lower remittances.

Context: Albania’s economy grew by 3.4% in the first quarter of 2025, driven largely by services and construction, though agriculture and industry saw slight contractions. Inflation stayed low, with annual price growth at 2.3% in August. In response, the Bank of Albania cut its base interest rate to 2.5% in July — the third cut since summer 2024.

In its statement the EBRD highlighted this stable outlook:

“The European Bank for Reconstruction and Development has kept its forecast for Albania’s economic growth unchanged at 3.5% for 2025 and 2026. This reflects expectations of a steady economic trajectory despite pressures from external and domestic factors.”

The report highlights key risks, including potential demand slowdown in the Eurozone, reduced remittance flows, and climate factors like droughts that could affect agriculture and electricity generation.

On the upside, structural reforms and steady progress in EU accession talks are expected to bolster growth prospects.

Fiscal outlook: The government aims to keep its debt on a downward trajectory, reducing public debt from 54.2% of GDP in 2024 to 45% by 2029. Lower borrowing costs are expected as the share of short-term debt falls and reliance on domestic financing grows.