TIRANA, Nov 13 /ATA/ – Albania’s economy maintained solid growth momentum in 2026, supported by consumption, investment, exports and expanding credit, with economic output rising by 3.6% in the second quarter, following growth of 3.7% in the first quarter, the Bank of Albania said.
In its quarterly Monetary Policy Report, the central bank said preliminary indicators for the third quarter pointed to continued steady growth, driven mainly by domestic demand and the positive performance of the tourism sector.
Labour market conditions also supported economic activity and consumption. In the second quarter, employment in the non-agricultural private sector increased by 2.3%, the unemployment rate fell to 8.3%, while private sector wages recorded annual growth of 11.6%.
Credit expansion was another positive indicator. Lending to the private sector grew by an average of 15.5% year-on-year in the third quarter, driven particularly by lek-denominated loans, business financing and real estate purchases. Meanwhile, the non-performing loan ratio fell to 3.6% in September.
Inflation averaged 3.2% in the third quarter, up from 3% in the previous quarter, mainly reflecting higher oil and unprocessed food prices. However, headline inflation eased to 2.9% in September, from 3.4% in July, moving closer to the Bank of Albania’s 3% target.
According to the report, external inflationary pressures have intensified amid geopolitical developments and rising international prices for energy and raw materials. These factors, alongside uncertainty surrounding the global economy, could affect domestic prices and foreign demand.
The Bank of Albania expects the country’s economy to continue growing close to its potential over the next two years, supported by income growth, expanding credit and favourable financing conditions. Inflation is expected to remain temporarily above target until early 2027 before gradually converging towards the 3% target.
The report also highlights several risks to this outlook, including an escalation of geopolitical tensions, potential disruptions to energy supplies and rising international costs. Domestically, social tensions and continued protests could undermine consumer, business and investor confidence, potentially weighing on consumption and investment, particularly in tourism and services.
Against this backdrop, the Supervisory Council of the Bank of Albania decided at its Nov. 3, 2026, meeting to leave its monetary policy stance unchanged.
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