Although Albania’s economy expanded by 3.9% in 2025, according to preliminary data from INSTAT, nearly 72% of that growth was driven by just two sectors that are not directly linked to real business activity: public administration and net taxes.
Based on preliminary estimates derived from quarterly Gross Domestic Product (GDP) data, public administration contributed 1.71 percentage points to overall growth, while net taxes added 1.11 percentage points.
Meanwhile, sectors representing the real economy — from extractive industries to agriculture and construction — expanded by only 1.08%, accounting for just 28% of total economic growth.
This marks the weakest growth in business-related economic activity since 2012, excluding 2020, when the country was heavily affected by the COVID-19 pandemic.
It is also the second consecutive year in which the state sector has been the primary driver of economic growth. In 2024, public administration and net taxes accounted for 51% of total growth for the first time in Albania’s post-communist history. In 2025, that trend became even more pronounced.
On average, the contribution of these two categories typically ranges between 15% and 30%, except during exceptional circumstances such as election years or periods of crisis, including the pandemic.
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