The European Bank for Reconstruction and Development has raised its forecast for Albania’s economic growth in 2026 to 3.5%, from 3.4% in June. The bank linked the revision to reforms and investment related to European Union accession. Albania’s economy grew by 3.8% in 2025 and by 3.7% in the first quarter of 2026. Public administration, construction and real estate supported economic activity.
The country’s external position also improved. The current account deficit narrowed, while record tourism revenues and high remittances continued to support the economy. Foreign direct investment rose by 11% year on year in the first quarter. Public finances also improved. The budget recorded a surplus in the first half of 2026, compared with a deficit of 1.8% of gross domestic product in 2025. Public debt fell to 49% of gross domestic product by mid-year. Credit continued to grow strongly, while banking sector asset quality improved.
Meanwhile, the European Bank for Reconstruction and Development identified competitiveness pressures, climate risks and energy price volatility as potential challenges. It expects Albania to grow by 3.5% in both 2026 and 2027. The bank forecasts average growth of 3% for Western Balkan economies in 2026 and 3.5% in 2027.
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