Public debt in Albania has followed a clear downward trend in the first quarter of 2026, falling to 48.79% of GDP, the lowest level recorded in the past decade.
Preliminary data from the Ministry of Finance show that the decline is not only linked to economic growth but also to an actual reduction in the debt stock.
At the end of March 2026, the total stock of central government debt, including state guarantees, reached around 1.357 trillion ALL, down from 1.401 trillion ALL at the end of 2025. This represents a nominal reduction of about 44 billion ALL in just three months.
The 4.08 percentage point drop in the debt-to-GDP ratio reflects both economic expansion and lower financial liabilities.
For 2026, GDP is projected at around 2.78 trillion ALL, increasing the economy’s capacity to manage public debt.
External debt contributed the most to the decline. Its share fell to 20.20% of GDP from 21.49% at the end of 2025. This drop is linked to a stronger lek, maturing obligations, and economic growth.
Domestic debt also continued to fall, reaching 28.59% of GDP from 31.38% a year earlier. State-guaranteed liabilities decreased to 1.49% of GDP, reducing fiscal risk exposure.
The improvement in public debt indicators strengthens macroeconomic stability. A lower debt ratio improves market confidence and increases fiscal flexibility.
Unlike previous periods, the reduction in early 2026 comes from an actual contraction of nominal debt, not only from economic growth.
This suggests that fiscal consolidation is supported by both a stronger economy and more careful debt management. The downward trend reinforces Albania’s medium-term goal of maintaining fiscal sustainability and reducing exposure to public liabilities.
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